The National Bank of Egypt (NBE) and Banque Misr are leading a coalition of six banks to provide EGP 10bn in financing to the Suez Canal Economic Zone (SCZone).
The long-term joint financing contract was signed by: SCZone Chairperson Yehia Zaky; NBE Chairperson Hisham Okasha; Banque Misr Chairperson Mohamed El-Etreby; Commercial International Bank – Egypt (CIB) CEO Hussein Abaza; Managing Director and Vice Chairperson of the Arab African International Bank (AAIB) Sherif Elwey; Banque du Caire Chairperson Tarek Fayed; and Suez Canal Bank (SCB) Chairperson Hussein Refaey.
The signing took place in the presence of: Waleed Gamal El Din, Executive Director of the SCZone; Mohamed Ibrahim, Assistant Chairperson of the Authority; Alaa Qotb, Legal Adviser to the Authority; Hossam El Din Abdel Moneim, Head of the Internal Audit Department; and Seif El-Din Moustafa, General Director of Investment and Financial Studies.
The coalition is led by NBE as a finance agent, primary organiser, and finance marketer. Four banks, namely AAIB, CIB, Banque du Caire, and SCB are acting as primary organisers.
The total funding amount of EGP 10bn will be directed to the development of the infrastructure and facilities in the industrial zones and ports of the SCZone.
After the signing, Zaky announced that this financing comes as part of the acceleration of the pace of operations within the zone. It also aims to speed up the completion of the infrastructure works and the remaining facilities in the industrial zones and affiliated ports.
Some important projects will be completed within two years as part of the desired goals of the strategy 2020/2025, he added. He noted that this funding contributes to completing the projects that the authority undertakes to attract more foreign investments. In addition, it is one of the self-financing arms, which will continuously bring revenues without burdening the state financially.
He said that Sokhna port will be an important hub on the Red Sea, a strategy that is in line with the policies of the Egyptian state to increase the efficiency of Egyptian ports.
Okasha said that the NBE is keen on contributing to financing part of the projects of the SCZone by being an organiser of the funding.
It also seeks to continue the development of the infrastructure work to support the state’s plans aimed at maximising and enhancing the authority’s role as a central logistical hub in global trade.
This would create new investment opportunities in industrial, commercial and maritime sectors. New industries will also reduce the volume of imports, promote local products that meet the needs of the market, and support the national economy.
Okasha emphasised the NBE’s keenness to provide the necessary financing to develop the entire economic zone and prepare the infrastructure for the six affiliated ports in accordance with international standards. These are namely the ports of West Port Said, East Port Said, Adabeya, Ain Sokhna, Arish, and Al-Tour.
This would enhance the efficiency of Egyptian ports, especially with the developing capabilities of their rivals.
El-Etreby said that this financing comes as part of the bank’s keenness as a leading bank in terms of arranging financing operations in the Egyptian market. It continues to play a pivotal role in supporting the national economy and the state’s infrastructure projects. It also seeks to attract investments to the Suez Canal through which over 12% of global trade passes each year.
For his part, CIB CEO Hussein Abaza expressed his pride in participating in this joint financing, which reflects the bank’s renewed commitment to support development projects.
He pointed out that there are benefits in Suez Canal projects for all economic sectors, including promoting investment opportunities in all sectors, including logistical and industrial sectors.
This will also create a business climate that encourages foreign and local investors to establish companies in the zone to benefit from all incentives offered.
Sherif Elwey, Managing Director and Vice-Chairperson of the Board of Directors at the AAIB, said that his bank believes in the importance of developing the SCZone’s industrial zones and ports.
This includes developing the zone’s unique capabilities, in order to achieve the state’s plan, and with the aim of reaching sustainable economic development and attracting more investments.
Fayed explained that his bank’s participation in the funding is a continuation of its role in supporting investments and national projects that have a positive impact on the national economy.
He pointed out that the bank’s business strategy and expansion plan aims to give full priority to all sectors. This is with a special focus on financing various major development projects that contribute to supporting the state’s plans to achieve Egypt’s vision 2030.
Hussein Refaey, Chairperson and Managing Director of the SCB, said that his bank has become a strategic partner for joint loan operations that contribute to supporting the state’s national projects.
The bank’s role as a primary organizer of the loan further reinforced the banking sector’s role in supporting plans that aim to maximize the role of the SCZone to support the national economy.
The financing is divided into two tranches, the first of amounts to EGP 5bn, whilst the second amounts $320m (equivalent of about EGP 5.026bn).
The NBE is contributing to the financing with a share of about 44.5% with a total amount of EGP 3bn ($92m). Banque Misr is contributing with a share of about 40% and about EGP 2bn ($128m), while the AAIB, CIB, the Banque du Caire are contributing with $30m each. The SCB is contributing with $10m.
The financing period covers 10 years, which comes with the aim of contributing to financing part of the investment cost of SCZone’s projects.
They include preparing the port infrastructure to attract new shipping lines and investors, creating an effective system to provide marine services, and supporting the zone as an industrial and logistical hub to make it a pivotal area in global supply chains.