The Agreement on Debt Conversion into Development Programs, signed between the Italian Republic and the Arab Republic of Egypt, entered into force on August 15, 2012. The agreement establishes a mechanism for converting a portion of the Egyptian debt into financing for sustainable development projects, implemented mainly in Egypt. The agreement has an initial duration of eleven years. However, as provided under Article 10.2, it is possible to extend the agreement’s duration, if necessary, through a specific contractual amendment. The agreement thus provides for the possibility of renewal for an additional period aimed at the completion of projects financed with the funds resulting from the debt conversion.

The agreement seeks to reduce Egypt’s debt burden toward Italy, while allowing for the conversion of the debt into development projects that address Egypt’s economic and social needs. The funds released through the debt conversion are used to finance projects in key sectors such as education, healthcare, infrastructure, environmental management, and support for small and medium-sized enterprises (SMEs). This mechanism is part of the broader framework of bilateral cooperation and the promotion of sustainable development.

The agreement of August 15, 2012, is linked to previous debt conversion agreements already signed between the two nations, including:

• The Debt Conversion Agreement signed in Rome on February 19, 2001;

• The Debt Conversion Agreement signed in Cairo on June 3, 2007.

 

LINK: Agreement