Egypt to receive $734m loan from Japan to develop fourth line of Cairo's metro

Package is third tranche of funds to be received through the Japan Intenational Co-operation Agency

Egyptian President Abdel Fattah El Sisi welcomes Japan's Prime Minister Fumio Kishida at the Presidential palace in Cairo. AP

Japan will provide Egypt with $734 million to fund the development of a stretch of Cairo's metro, Egyptian Prime Minister Mostafa Madbouly announced at a business forum of the two countries on Sunday evening.

When completed, it will connect Cairo’s city centre to the satellite city of 6th of October and the nearby Giza plateau, Mr Madbouly said at the Egypt-Japan Business Forum, which was attended by a visiting delegation led by Prime Minister Fumio Kishida.

The investment package, Egypt's largest to date with Japan, was signed earlier on Sunday during a meeting between Mr Kishida and Egyptian President Abdel Fattah El Sisi.

The meeting was the first event of the three-day Egyptian-Japanese summit taking place in Cairo.

The package constitutes the third tranche of funds to be received by Cairo over the past decade for the development of the first phase of the city’s fourth metro line.

Construction has been ongoing since 2012.

The first $245 million instalment was received that same year, while the second, worth $301 million, was approved by Egypt’s parliament in December last year.

The loans are offered at a lower interest rate and have long repayment schedules.

The new metro line will begin operating in 2028, said a statement from the Japan International Co-operation Agency, the loan provider.

According to a recent report from Egypt's state statistics agency Capmas, Japanese investments in Egypt reached $73.7 million last year, up from $37.1 million the previous year, an increase of 98.7 per cent.

During his address, Mr Kishida expressed an openness on the part of Japanese companies for further investment in Egypt.

After his meeting with Mr Kishida on Sunday, Mr El Sisi said he had presented him with a number of economic and legislative reforms to improve Egypt’s investment climate.

“I invite the Japanese government to encourage Japanese companies to bring more investments to Egypt,” Mr El Sisi said at a joint press conference held at Al Ittihadiya Presidential Palace on Sunday afternoon.

A number of agreements in communication and information technology sectors have been signed since the arrival of the Japanese delegation on Saturday evening.

Last year, Egypt’s imports from Japan amounted to $709 million, according to the United Nations Comtrade database on international trade.

Egyptian exports to Japan reached $238 million during the same period, with fuel oil and other petroleum products making up around $181 million of that figure.