Egypt OKs Plan for €3B Military Gear Loan From France

[Zarvan]

GABORONE, Botswana — The Egyptian parliament has approved government plans to secure a €3.37 billion (US $3.76 billion) loan to fund the acquisition of weapons and military equipment, including Navy vessels and fighter jets, as part of the country's ongoing force modernization program, a new parliamentary report has said.

According to a recent weekly report of parliamentary proceedings, the Egyptian Ministry of Defense approached parliament early this year seeking approval for a defense loan to be advanced by a group of French banks led by Credit Agricole for Companies and Investment. The military hardware will be supplied by several French defense equipment manufacturers.

"These banks will provide a cash loan of 3,375.54 million euros, representing 60 percent of the value of French military equipment that will be delivered to Egypt. The total value of this equipment is estimated at 5,625.9 million euros, with Egypt to pay the remaining 40 percent,” the report also revealed.

The loan has since been guaranteed by the Egyptian Ministry of Finance. According to the parliamentary report, the loan was overwhelmingly approved by the House, which felt that it is necessary to boost the firepower of the Army, the Navy and Air Force in the fight against domestic and regional terrorism.

The Egyptian defense forces have been battling several local jihadist groups and Al-Qaida and Islamic State affiliate militias in the Sinai Peninsula since 2013. In addition, the country faces enhanced security threats from dozens of trans-national terrorist groups — including IS — which have taken advantage of the political and security chaos to set up in neighboring Libya.

Like Russia, France has cashed in on the spike in Egyptian defense spending since 2013 to sell navy vessels, fighter jets and aerial defense systems. In 2014, Egypt ordered four Go-Wind corvettes and 45 MM-40-3 Exocet missiles to arm the vessels.

Delivery is set to start later this year and be completed by the end of 2017. Egypt has also ordered 24 Rafale jets and 500 AASMs and 150 MICA air-air missiles to arm the aircraft. In 2015, the Egyptian Navy acquired two French-made Mistraal Class helicopter carriers and ended the year with a giant order of 46 Russian-made Kamov - Ka-52 attack helicopters for the vessels.

Email: onkala@defensenews.com

Egypt OKs Plan for €3B Military Gear Loan From France

 

[MICA]

For the bla bla bla of Gulf funded all your deals

 

[Kambojaric]

For the bla bla bla of Gulf funded all your deals

Could you elaborate on the security paradigm of Egypt. To put it in more blunt terms, who will these weapons theoretically be used against? Rebels in the Sinai pose the largest security threat to Egypt at the moment as far as non-Egyptians can see, and yet how will corvettes or air to air missiles assist in curbing this threat, given that this threat is largely an irregular band of militias using classic guirella tactics?

 

[Hell NO]

Could you elaborate on the security paradigm of Egypt. To put it in more blunt terms, who will these weapons theoretically be used against? Rebels in the Sinai pose the largest security threat to Egypt at the moment as far as non-Egyptians can see, and yet how will corvettes or air to air missiles assist in curbing this threat, given that this threat is largely an irregular band of militias using classic guirella tactics?

There are no rebels in the sinai.they are terrorists that target locals just like they target the army.

- the egyptain army has more than what they need to fight a small terrorist group that is only active in a small area (44 apaches +220 f16+1250 M1A1etc).
-the weapons are needed because failing to prepare is preparing to fail and No one wants to be in the position were the equipment needed are not present.

 

[mike2000 is back]

GABORONE, Botswana — The Egyptian parliament has approved government plans to secure a €3.37 billion (US $3.76 billion) loan to fund the acquisition of weapons and military equipment, including Navy vessels and fighter jets, as part of the country's ongoing force modernization program, a new parliamentary report has said.

According to a recent weekly report of parliamentary proceedings, the Egyptian Ministry of Defense approached parliament early this year seeking approval for a defense loan to be advanced by a group of French banks led by Credit Agricole for Companies and Investment. The military hardware will be supplied by several French defense equipment manufacturers.

"These banks will provide a cash loan of 3,375.54 million euros, representing 60 percent of the value of French military equipment that will be delivered to Egypt. The total value of this equipment is estimated at 5,625.9 million euros, with Egypt to pay the remaining 40 percent,” the report also revealed.

The loan has since been guaranteed by the Egyptian Ministry of Finance. According to the parliamentary report, the loan was overwhelmingly approved by the House, which felt that it is necessary to boost the firepower of the Army, the Navy and Air Force in the fight against domestic and regional terrorism.

The Egyptian defense forces have been battling several local jihadist groups and Al-Qaida and Islamic State affiliate militias in the Sinai Peninsula since 2013. In addition, the country faces enhanced security threats from dozens of trans-national terrorist groups — including IS — which have taken advantage of the political and security chaos to set up in neighboring Libya.

Like Russia, France has cashed in on the spike in Egyptian defense spending since 2013 to sell navy vessels, fighter jets and aerial defense systems. In 2014, Egypt ordered four Go-Wind corvettes and 45 MM-40-3 Exocet missiles to arm the vessels.

Delivery is set to start later this year and be completed by the end of 2017. Egypt has also ordered 24 Rafale jets and 500 AASMs and 150 MICA air-air missiles to arm the aircraft. In 2015, the Egyptian Navy acquired two French-made Mistraal Class helicopter carriers and ended the year with a giant order of 46 Russian-made Kamov - Ka-52 attack helicopters for the vessels.

Email: onkala@defensenews.com

Egypt OKs Plan for €3B Military Gear Loan From France

WOW.......Seems like France is displacing the U.S as Egypts biggest military provider/partner. That's alot of cash there.
Egypt seems to be building a formidable military and navy. Thry may have the most powerful/capable military in the region once all these deals are completed. Interesting.

 

[Kambojaric]

There are no rebels in the sinai.they are terrorists that target locals just like they target the army.

- the egyptain army has more than what they need to fight a small terrorist group that is only active in a small area (44 apaches +220 f16+1250 M1A1etc).
-the weapons are needed because failing to prepare is preparing to fail and No one wants to be in the position were the equipment needed are not present.

Thats well and true of course. Its just that from an outsiders perspective the timing of this buildup sounds a bit odd. I mean foreign reserves have fallen from $36bn to $16bn (http://www.economist.com/news/finan...ange-egypt-allows-its-currency-fall-dwindling), the tourism industry is suffering from terrorists as you aptly named them, and the value of the currency is falling. Just sounds like maybe Sisi should have waited a couple of years and let things settle down financially before going on his spending spree. Still this is as said just an outsiders view. and you guys know your country and region better than anyone of course.

 

[Hell NO]

Thats well and true of course. Its just that from an outsiders perspective the timing of this buildup sounds a bit odd. I mean foreign reserves have fallen from $36bn to $16bn (http://www.economist.com/news/finan...ange-egypt-allows-its-currency-fall-dwindling), the tourism industry is suffering from terrorists as you aptly named them, and the value of the currency is falling. Just sounds like maybe Sisi should have waited a couple of years and let things settle down financially before going on his spending spree. Still this is as said just an outsiders view. and you guys know your country and region better than anyone of course.

I think the timing of the deals has to do with the massive discoveries of gas off shore and outside our national waters and while we are in an agreement with Cyprus and Greece. turkey and Israel are not happy + the navy and airforce haven't made a deal in years so it make sense.
http://www.nytimes.com/2015/10/29/b...s-to-upend-mideast-energy-diplomacy.html?_r=0

Is Turkey the odd man out as Egypt, Greece, Cyprus cozy up? - Al-Monitor: the Pulse of the Middle East

 

[BordoEnes]

For the bla bla bla of Gulf funded all your deals

Well honestly this really isnt any better.

 

[Frogman]

Could you elaborate on the security paradigm of Egypt. To put it in more blunt terms, who will these weapons theoretically be used against? Rebels in the Sinai pose the largest security threat to Egypt at the moment as far as non-Egyptians can see, and yet how will corvettes or air to air missiles assist in curbing this threat, given that this threat is largely an irregular band of militias using classic guirella tactics?

To give a more thorough answer. In no particular order:

Protection of shipping lanes and Suez Canal - Perhaps the most strategic and important shipping hub in the world requires a strong Naval (there is also a strong Air and AD presence across the canal) presence in the Red Sea and the Mediterranean to deter piracy or conventional forces operating nearby intending on blocking routes to the canal (eg Bab El mandab). It is also the reason why Egypt maintains a large (if not aging) de-mining fleet.

Protection of gas rights in the Mediterranean - protection of gas fields (some of which are disputed) requires a strong Naval presence in the Med and one that can operate in blue waters (if necessary). Constant Naval modernisation is required.

Border disputes - Egypt has a border dispute with Sudan over Halaib and Shalateen which has caused low level skirmishes to erupt between the two nations before. Maintaining a conventional deterrent will ensure Sudan will not attempt to take this territory although there will still be tension over them.

Instability in neighbouring nations - Requires a strong border guard and Army presence to prevent or foil cross border raids and the ability to conduct deep surgical strikes if and when necessary. Air Defence assets are also required alongside the Air Force to deter enemy air.

Commitments to Gulf Arab nations - shared defence protocols requires us to be able to rapidly move forces (by sea) in the event a Gulf Arab nation comes under attack. Long range fighters can deploy to forward air bases quickly without the need for a refuel and Naval assets can escort the Ro-Ro ships (or even the Mistrals) transiting troops and armour.

Counter Terrorism - Egypt already has several arms stationed in the Sinai and there are plenty of deals (eg Armed/Recce UAV, MRAPS, comms etc) that are Sinai-centric. New acquisitions can further help in enforcing a sea blockade and provide more sophisticated equipment for ISTAR (although not totally nessecary considering current capabilities).

Israel - Although we have a peace treaty and warmish relations it is the only nation with a conventional military in the region that can and has taken territory from the republic and held it for a prolonged period of time. It is also fond of using its air arm to conduct operations in other sovereign nations. The majority of conventional build up is still aimed at deterring Israel and being able to defend Egypt from a possible attack (however unlikely).

Water rights - specifically Ethiopia, although any Nile nation can fall into this if they intend to lessen Egypt's water supply. Egypt has to build and maintain long range strike capabilities in order to deter and if nessecary foil nations from building dams on the Nile that may lessen Egypt's historical and vital water rights. Although a strike will always be an option of last resort.

As you can see there's plenty to deal with but at the same time the Armed Forces is in a modernisation drive to replace obsolete and legacy systems while also trying to fill capability gaps.

The economic situation has been dire since the 2011 revolution but the arms deals are somewhat separate. The previous five year procurement cycle was delayed due to the political unrest within Egypt so now what we are seeing is contracts racking up, some of which were planned in 2011 (eg Rafale) but had to be delayed.

Well honestly this really isnt any better.

Soft loans are a standard practice for large scale multi-year (thus over several procurement cycles) contracts for many nations. It's nothing out of the ordinary really.

 

[Kambojaric]

@Frogman : Thank for the thorough and informative post. Like us, you guys seem to be surrounded with threats on all sides.

 

[Taygibay]

Just sounds like maybe Sisi should have waited a couple of years and let things settle down financially before going on his spending spree.

Or he could have envisioned the long term understanding an intensive rebuild to be necessary
to bring the country back to pre-2010 and went ahead?

The decisiveness of the moves Rafales FREMM Mistrals point that way, including add. autonomy.
The commitment to a new regional club / Arab League paradigm is also thus covered.

Have a great day, Tay.