Italy and Egypt have signed a debt swap agreement under which about US$150 million of Egyptian foreign debt to Italy will be converted to local currency and used to support poverty alleviation and food security initiatives in Egypt.
 An Egyptian farmer returns from the fields - IFAD/G. Bizzarri |
The agreement was one of the first fruits of the Rome Millennium Initiative, a joint effort between FAO, IFAD, WFP, the City of Rome and the Italian Government to extend debt relief for developing countries.
The Government of Egypt indicated various entities as beneficiaries of the debt swap proceeds, including the Ministries of Education, Health and Agriculture, as well as the Social Fund for Development.
Following a visit to Cairo by IFAD in July 2000 to discuss the Millennium Initiative with the Egyptian authorities and local representatives of FAO and WFP, the Egyptian Ministry of Agriculture and Land Reclamation (MALR) proposed a number of projects for support. The West Noubaria Rural Development Project (WNRDP) - a project that is in line with IFAD's strategy in Egypt - was one of those proposed.
In early October 2000 another IFAD mission visited Egypt as work began under the WNRDP. The mission worked with both WFP and FAO country staff and produced a report on the WNRDP on behalf of the Rome-based agencies.
 Farmers using a manually operated water wheel - IFAD/G. Bizzarri |
A joint FAO/IFAD mission worked with the Egyptian authorities on the formulation of the project proposals. FAO provided two members - an agronomist and a financial analyst - and IFAD five - the mission leader, a marketing specialist, a rural finance specialist, a resource person and a community development specialist.
It was agreed that IFAD would provide a loan of US$15 million to finance part of the project's cost. FAO's involvement would consist principally of technical assistance in the fields of irrigation, water-user association development, and marketing extension and support provision. For WFP, the main requirement was for food supplies to new settler households. WFP would assist with the logistics of distributing food purchased using the Italian debt swap monies. The remainder of the project cost would be provided from the Italian debt swap proceeds, and contributions from the Government of Egypt and the project beneficiaries.
Dialogue between the Rome-based UN food agencies will continue in order to finalize cofinancing arrangements and give further support to the WNRDP.
