State Department sources indicated today that the United States is about to resume government-financed shipments of vegetable oil and grain to Egypt which were suspended when Cairo broke diplomatic relations with the US during the 1967 Six-Day War. According to the sources, the shipments will be resumed in light of the Egyptian government’s pledge to resume payments next week on US loans outstanding since 1967.
Egypt has promised to pay back $147 million in loans over a seven year period. This arrangement will clear the way for a new line of credit to Cairo by the Commodity Credit Corp. which will enable Egypt to purchase more commodities in this country, the sources said.
In a related development, the International Development Association has approved $30 million in interest-free credit for Egypt to finance the first phase of a five year (1972-76) $319 million program to rehabilitate Egypt’s State-owned railway system. The program will concentrate on the modernization of the Egyptian rail transportation network to meet rising traffic demands, to improve safety and service and reduce operating costs.
The IDA will finance about 46 percent of the foreign exchange costs with the balance covered by credits already available to Egypt under bilateral arrangements and suppliers credits. The credit is repayable over a 50 year period. Though there is no interest charge, there is a service charge of three quarters of one percent a year and a ten year grace period.
Sen. John Sherman Cooper (R., Ky.) met today with Egyptian President Anwar Sadat in Cairo and with Premier Mahmoud Fawzi and Foreign Minister Mahmoud Riad. Sen. Cooper, a member of the Senate Foreign Relations Committee, voted against a Senate resolution Nov. 23 calling on the Nixon administration to supply more Phantom jets to Israel. The resolution was passed $2-14. Two Democratic Senators reportedly will visit Cairo next week. They are Lloyd M. Bentsen of Texas and John V. Tunney of California.
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