Egypt is set to receive a $1.6bn loan from China, according to local banking sources.

A source close to the central bank has told MEED the loan will be given directly to the Central Bank of Egypt in order to boost the country’s foreign reserves.

It is understood that the loan will be finalised during the Chinese president’s visit to Cairo on 21-22 January.

Egypt’s foreign reserves currently sit at $16.4bn and continue to be under pressure as foreign currency revenues from tourism, foreign direct investment and the Suez Canal dry up.

The visit will also see the signing of a $500m and $100m loan deals to the National Bank of Egypt and Banque Misr respectively, according to Banque Misr’s chief executive Mohamed al-Etribiy.

Earlier this month MEED reported that China will sign contracts for three large infrastructure projects with major Chinese firms, worth a total value of about $10bn, with President Abdul Fatah al-Sisi on the morning of 21 January.

Egypt is also planning on borrowing $1bn in concessional loans from a Chinese bank to finance sanitation networks.

On 2 September 2015, Egyptian Investment Minister Ashraf Salman signed a MOU with China State Construction Engineering Corporation to take over part of the New Capital project.