Egypt launches 1st phase of EGP 30 bln initiative to support priority industrial sectors
El-Wazir emphasized that this new initiative is the third initiative in a series of initiatives set to operate concurrently.
The previous two initiatives included, first, an ongoing initiative that the Central Bank of Egypt (CBE) previously launched to finance the industrial sector for purchasing equipment and machinery while meeting the needs of companies that have already received funding.
The second initiative, currently under review by the Central Bank, involved establishing a fund with financial contributions from banks and financiers to support struggling factories.
El-Wazir stated that the current initiative targets private sector companies in seven priority industrial sectors identified by the Ministry of Industry as follows:
- Pharmaceuticals: companies manufacturing active pharmaceutical ingredients (APIs), including cancer drugs, antibiotics, and cosmetics.
- Engineering Industries: companies manufacturing industrial machinery, renewable energy components, solar cells, hydrogen production inputs, wind power plant components, and more.
- Food Industry: companies manufacturing powdered milk, infant formula, medicinal plants, dried fruits, and fruit concentrates.
- Textiles: companies manufacturing synthetic and blended yarns.
- Chemicals: companies manufacturing inks, polyethylene, polypropylene, and acrylic.
- Mining: companies extracting mineral resources used in pharmaceuticals, food, and technology industries.
- Building Materials: companies manufacturing ceramics, marble, granite, and pipes.
Furthermore, El-Wazir noted that priority will be given to establishments located in areas most in need of development, such as border governorates, including the Red Sea south of Safaga, Upper Egypt governorates, southern Giza, and the Suez Canal region (Port Said, Ismailia, and Suez east of the canal).
He added that companies participating in this initiative would also benefit from a subsidized interest rate of 15 percent provided by the "Public Treasury Authority" for five years from the initiative's launch date. The maximum financing limit for a single client is EGP 75 million, and for related parties, it is EGP 100 million.
These companies also receive an additional 1 percent reduction in interest rates if the domestic added value of their products increases by 7 to 10 percent compared to the previous fiscal year.
Domestic added value is the portion of a product's total value generated within the country through local resources, labour, and production processes, excluding imported components.
The interest rate reduction rises to 1.5 percent if the domestic added value exceeds 10 percent. Furthermore, the reduction can increase to 2 percent for newly introduced industrial activities that have not been previously produced locally and have high import volumes.
On 5 December, El-wazir announced that developing the industrial sectors that the government prioritizes requires a loan of approximately EGP 7.7 billion.
Similarly, the Ministry of Petroleum and Mineral Resources has introduced new incentives for industrial investors to address outstanding gas debts.
These include allowing industrial clients to pay a portion of their debt without interest within three months and extending the repayment period for new debts for up to 10 years, with interest paid according to the current interest rate set by the CBE.
Additionally, factories that export and pay their gas bills in US dollars will benefit from exchange rate stability.