CAIRO: Egypt is to sign a $100 million renewable loan facility with the Abu Dhabi Fund for Development (ADFD) to fund its grains purchases, Supply Minister Ali Moselhy said.

Abu Dhabi-based agribusiness firm Al Dahra will be one of the first suppliers of the grain through the deal, but Moselhy said that the funding could be used for other purchases.

The loan will be facilitated through ADFD’s Abu Dhabi Exports Office (ADEX), people familiar with the deal told Reuters. The Ukraine war delivered a broad shock to Egypt’s economy, causing investors to pull out billions of dollars. Its currency tumbled and inflation soared.

The country’s state grains buyer, the General Authority for Supply Commodities (GASC), had started deferring payments for its wheat purchases as a result of the acute currency crunch.

The finance ministry said funding for subsidies on food, mostly bread, will rise 41.9% to 127.7 billion Egyptian pounds ($4.1 billion) in the fiscal year from July 2023 to June 2024. Many recent wheat purchases have been made with loans from the International Islamic Trade Finance Corporation (ITFC), which last year doubled a credit facility extended to Egypt to $6 billion, and from the World Bank, which funded wheat imports earlier this year.

Egypt is one of the world’s biggest wheat importers, buying around five million tonnes of wheat annually from abroad. Heavily subsidised bread, a politically sensitive benefit, is available to more than 70 million of its 104 million population.