Second Fiscal Consolidation, Sustainable Energy & Competitiveness DPF

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The development objective of the Second Fiscal Consolidation, Sustainable Energy Competitiveness Development Policy Financing Project for Egypt is built around three pillars, which are also the program development objectives (PDOs) of the programmatic series. The series focuses on three pillars. First, by enhancing macroeconomic and fiscal stability the operation will help boost investor confidence and free up domestic financing for the private sector and make public resources available for social spending. Second, by creating a more dynamic and commercially oriented energy sector, the operation will improve service delivery and enable a scale-up in private investment. Third, the operation will help improve competition and the regulatory environment for businesses. Implementation of the first wave of reforms under the three pillars was modest at first but has made significant progress since the parliament’s endorsement of the Government’s reform program in April 2016. Against this backdrop, there are high expectations and demands of the population for improved service delivery, sustained economic growth that creates jobs, and better living conditions. This operation is part of an international package aimed at supporting the economic reform program of the Government of Egypt (GoE) to bring the economy back on track amid macroeconomic and social vulnerabilities. The DPF series’ approach to help address these issues is grounded in the World Bank Group (WBG) MENA Strategy, which aims to renew the social contract so that it is based on greater citizen trust; more effective protection of the poor and vulnerable; inclusive, transparent, and accountable service delivery; and a stronger private sector that can spur job creation. The operation builds on the analysis and pillars set out in the Systematic Country Diagnostic (SCD) for Egypt, including the three highest priorities: macroeconomic stabilization, continued energy subsidy reform, and improvement in public governance. The DPF series is fully aligned with the Country Partnership Framework (CPF) for Egypt, which, along with the MENA Strategy, seeks to achieve the WBG twin goals of eradicating extreme poverty and boosting shared prosperity in a sustainable manner. Additionally, the operation is closely aligned with the World Bank’s new MENA Climate Change Action Plan, which commits to support critical policy reforms to remove distortion prices and regulations, open up fiscal space, and catalyze private investments. Although there are important risks, including from the macroeconomic and reform implementation perspectives, the proposed DPF series is expected to play a key role in supporting much needed structural reforms. The DPF is anchored in the Government’s medium-term reform program. The GoE has developed a long-term vision—Egypt’s 2030 Sustainable Development Strategy—and a medium-term reform plan. This medium-term reform plan was developed in consultation with civil society and the private sector and was endorsed by the parliament in April 2016. Significant measures toward implementation of the program have been taken over the past two years, especially in the first half of FY17. The reform program sets ambitious targets for sustainable, private sector-led growth and job creation, to be achieved by FY19 through reforms grouped under four main themes: macro-fiscal stabilization, private sector-led growth, social and economic inclusion, and transparency and accountability.

FY17 - Energy and Extractives,FY17 - Industry, Trade and Services,FY17 - Public Administration

World Bank Group

Project

Solar, Manufacturing (Industrial), Wind, Government