The African Development Bank has extended a loan of EUR145 million to finance reliability and performance upgrades to the country’s rail system under the Egypt National Railway Modernization Project.

The loan support will bolster operational and to increase network capacity on the national rail lines.

Dr. Rania A. Al-Mashat, Egypt’s Minister of International Cooperation alluded to the need for “safe, accessible, convenient and green transports will be crucial to achieving sustainable development.”

“The improvement and expansion of Egypt’s rail system through the ENRMP allows for active mobility and enables urban and rural development through an inter-modal linked system.

“Technology and innovation, and a robust commitment to public transport will all be vital components of building back better.”
Dr. Rania A. Al-Mashat, Egypt’s Minister of International Cooperation

More so, rail transport plays a central role in Egypt’s economy and to its competitiveness in the region. As it stands now, only 8% of passenger traffic and 6% of freight traffic move by rail, per national estimates.

However, rail passenger and freight traffic are likely to increase to 15% and 10% respectively by 2029. This is as a result of the AfDB’s loan support and other investments towards the project.

Contribution of loan facility to Egypt’s rail transport system

Furthermore, this amount of injection into the railway sector will contribute substantial benefits to low-income earners. About 40% of the population rely on train transport as an affordable mode of transport. Increased use of rail transport has a net positive impact on economies, as it reduces greenhouse gas emissions.

Prior to this loan facility, the Government of Egypt has committed significant investments to enhance the country’s rail infrastructure. These investments have been channelled towards rail renewals, modernization of signalling and the purchase of new rolling stock.

Meanwhile, under the Egypt National Railway Modernization Project a state-of-the-art, cost effective train protection system will be installed on 950 km of rail line; routes connecting Alexandria in the north to Negh Hammadi in the south, and Port Said in the east.

Other recent developments indicate that, early last year, the country received EUR 2.7 million funding for two railway projects. The aim of the projects include modernizing the already existing rail lines totalling 183km. The rail lines were from stretches between Damietta line and Cairo metro line.

Furthermore, the Suez Canal Economic Zone and the Sovereign Fund of Egypt signed an agreement in November 2020 to invest $10 billion into Egypt’s National Company for Railway Industries.

The partnership was to produce 300 railway cars and provide 2,000 jobs, as well as increase Egypt’s export ability.

“The newly approved project will enhance the multimodal transportation environment in Egypt, and the efficient movement of people, services and goods,”

“This operation is fully aligned with the Bank’s strategy for interventions in Egypt. [Thus], contributing to sustained and inclusive economic growth, and more specifically, developing infrastructure that supports expansion of the private sector and job creation.”
Malinne Blomberg, the Bank’s Deputy Director General for the North Africa region