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Egypt's Public Treasury bears EGP 7.1bn of vehicle replacement financing

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Egypt’s Public Treasury bears EGP 7.1bn of vehicle replacement financing

Door open to all banks operating in Egyptian market to participate in car replacement initiative, says Finance Minister

Egypt’s Minister of Finance Mohamed Maait has announced that the Public Treasury will bear EGP 7.1bn towards financing the replacement of old vehicles to new models that run on dual-fuel systems.

The move comes in implementation of President Abdel Fattah Al-Sisi’s mandates, to grant appropriate financial incentives to owners of obsolete cars so they can purchase new, greener models.

The Public Treasury funding comes as part of the presidential initiative’s first phase to replace 250,000 obsolete cars in seven governorates.

In a statement on Saturday, Maait added that the cabinet has agreed to grant car owners financing to cover 10% of the price of the new car, up to a maximum of EGP 22,000.

Those looking to purchase taxis will be granted financing to cover 20% with a maximum of EGP 45,000, whilst microbus owners will receive 25% with a maximum of EGP 65,000. This financing will be provided at a 3% diminishing interest rate set, and a payment period of up to ten years.

Maait said that the initiative helps reduce the financial burdens on citizens by providing them with unprecedented financial incentives and credit facilities.

He noted that it will have positive effects in reducing greenhouse gas emissions, whilst contributing to facilitating traffic and easing disruption. This will ensure that there are no aging cars on Egypt’s roads that will frequently breakdown to cause traffic jams.

The minister added that the incentives contribute to revitalising the auto industry, especially those industries that feed into it. It requires cars to be assembled in Egypt, with a local component ratio of no less than 45%.

He pointed out that Egypt manufactures many automotive components, and has become one of the most important manufacturers and exporters for a number of car feeding industries worldwide, such as electric parts.

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