The World Bank move is explicitly aimed at bolstering the Arab Spring democratic revolutions The World Bank has pledged $6bn in loans for Egypt and Tunisia in a move explicitly to bolster the Arab Spring.Egypt, which will receive $4.5bn over two years, is also speaking to the International Monetary Fund (IMF).
Meanwhile, Qatar has offered to make up to $10bn in investments in Egypt.
It comes after the European Bank for Reconstruction and Development - set up to aid post-Communist Eastern Europe - said at the weekend it would start lending to emerging Arab democracies.
Egypt and Morocco had already applied to the EBRD for financial assistance.
But while the lender said it hoped eventually to provide up to 2.5bn euros ($3.5bn) a year to the region, any such wholesale geographic reorientation of its mandate would need the approval of all of its 63 members.
Funding gapLike the EBRD, the World Bank explicitly stated its desire to support the Arab Spring of democratic revolutions.
"Our support, and that of others, can sustain momentum and accelerate progress, but only if coupled with real reform," said Robert Zoellick, World Bank president.
The World Bank money will be made conditional on the countries' progress in modernising their economies.
Tunisia - which was the first country to oust its former dictator - will receive $1.5bn from the international lender, of which $500m is part of a previously-announced $1.2bn package put together with the African Development Bank and European donors.
Continue reading the main story $10bn expected funding shortfall in 2011-12$4.5bn new loans from the World Bank over two years$1.2bn in existing World Bank support$1bn debt forgiveness by US, plus $1bn loan guarantees$4bn aid package from Saudi Arabia$10bn investments from QatarMulti-billion dollar loans from the IMF to be agreedTwo tranches of $1bn, to be provided directly to the Egyptian government this year and next, would be linked to "governance and openness reforms".The other money would be provided in other formats, such as guarantees, private business loans and infrastructure financing.
Egypt's financing needs are daunting, thanks to a collapse in the economy - notably the tourism industry - triggered by the recent political turmoil.
Elevated demands of the people after the revolution were adding to pressure on the budget, Finance Minister Samir Radwan told the BBC earlier this month.
The country expects to run a deficit of 9-10% of economic output in the coming year and faces a financing gap of $10bn-12bn, which it has already formally applied to the IMF to help plug.
Gulf supportQatar's planned investments in Egypt are expected to be consummated during a visit to Egypt by Qatar's emir this Saturday.
"I believe these projects, when implemented, will surpass $10bn and they will be productive products in Egypt," said the Qatari ambassador, Saleh al-Buainein.
The emirate may also buy up Egyptian government bonds in order to help fund its deficit.
It comes after the US and Saudi Arabia offered the new Egyptian government financial support.
The US said it would cancel $1bn in debts and provide a further $1bn in loan guarantees to support infrastructure finance.
Meanwhile, Saudi Arabia has offered a $4bn aid package.
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