Italian Loan for Egypt to Finance the MEGA Deal

The Egyptian parliament has approved the Presidential Decree No. 374 of 2020 approving an Italian loan for Egypt. The decree approves two loan agreements between the Egyptian Ministry of Defence, the Italian Export Development Authority (SACE) and the Italian group of banks and financial institutions, reports Defense Arabic.

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Informed government sources said that the decision was signed two weeks ago subject to ratification, and that this loan is part of financing the standard armament deal that Egypt is conducting with Italy in stages, and an important part of it has already been approved, including the purchase of two multi-purpose FREMM frigates.

It also includes a preferential condition that allows Egypt to have two other frigates of the same type, other than those agreed (Skirjat and Bianchi) if the order is during the current year, at a value of 1.1 billion euros. This means that, by next year, Egypt may have 5 FREMM Bergamini multi-tasking French frigates, given the French "Long live Egypt" currently working for the navy.

This deal is the beginning of a long-term strategic military cooperation between the Egyptian and Italian sides, and may include the signing of additional armament contracts during the coming period, including:

  • Four frame frigates to be built specifically for Egypt and the contract may include construction technology transfer locally.
  • 20 PPA multi-mission ship with construction technology transferred locally within the Egyptian Naval Shipyard.
  • 24 Eurofighter Typhoon combat aircrafts.
  • 24 Advanced Trainer / Operational Conversion Unit OCU / Light Combat Aircraft LCA aircraft (Aermacchi M-346 Master).
  • Radar Imaging Satellite.

These contracts will be the responsibility of Fincantieri Shipbuilding, Leonardo Aerospace and Defense and Security Industries, and MBDA for the missile and ammunition industries.

According to the sources, the total deal is likely to reach 11 billion euros, which will make Egypt at the top of the list of the largest arms importers in the world in the past 4 years.

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