SCZONE seeks to secure 30 billion EGP loan from local banking consortium

Newsletter

19 Sep 2023

SCZONE seeks to secure 30 billion EGP loan from local banking consortium. The General Authority for Suez Canal Economic Zone (SCZONE) is planning to borrow 30 billion EGP from a local banking consortium, led by the National Bank of Egypt (NBE), to finance green hydrogen infrastructure projects. The 20-year loan will be financed by a number of banks, including Banque Misr, Suez Canal Bank, the Commercial International Bank (CIB), Banque du Caire, and the Arab African International Bank (AAIB). It is noteworthy that the Egyptian government expects total foreign direct investment (FDI) into green hydrogen projects to reach around 81.6 billion USD by 2035. (Asharq Businees)

Egypt Administrative Capital is considering offering up to 10% of its shares in the first half of 2024.
Egyptian President Abdel Fattah El-Sisi said in August 2021 that the Administrative Capital Company may be listed on the Egyptian Stock Exchange in a record public offering within two years, noting that the company possesses liquid assets worth 100 billion EGP, and assets under management ranging between 3 and 4 trillion EGP. (Asharq Business)
The production of the Zohr gas field in Egypt declined by 11% within a year.
The average daily production last fiscal year reached 2.4 billion cubic feet from 2.7 billion cubic feet a year ago, which indicated Egypt’s plans to start production from well No. 20 in the field next October to compensate for the natural decline and maintain production rates. The discovery of the "Zohr" field in 2015 contributed to opening investors' appetite for the gas sector in the country, which contributed to increasing the number of discovered wells, and led the country to completely stop importing gas at the end of September 2019, and then export it. (Asharq Business)
Petrobel invests 737 million USD in natural gas, oil fields during 2022.
The company’s production of oil, natural gas, condensates, and butane during 2022 amounted to about 93 million barrels of oil equivalent. Petrobel has also drilled a number of exploratory wells, the most important of which is the South Qaraa-1 well. Production from the well started in February, with an average production rate of 9 million cubic feet daily, in addition to 100 barrels of condensate, with a total reserve estimated at about 2 million barrels of oil equivalent. (Arab Finance)
Zilla Capital is expecting the Central Bank of Egypt to leave interest rates unchanged when it meets on Thursday.
The main two reasons behind holding rates steady are, firstly, the latest inflation rates came last month less than expected, and the second reason is that the exchange rate is stable, whether in the official or parallel market. The overnight deposit rate stands at 19.25%, while the overnight lending rate is 20.25%, and the main operation and disc. rates are at 19.75%. The central bank has increased rates by 1.1k bps since March 2022, with 300 bps of hikes coming this year. The MPC last raised rates in August when it decided on a 100-bps hike.
Inflation is showing signs of moderating.
Though annual inflation clocked a new record high in August, on a monthly basis price growth slowed for the third consecutive month to 1.6%, indicating weakening price pressures. Given this, there is “no need” for the central bank to raise rates this week when it will likely need to soon make moves following the expected devaluation of the EGP.
There are a lot of rumors in the market spreading that the central bank will devalue the currency again to coincide with the IMF’s anticipated review of the 3 billion USD loan program.
Despite committing to a flexible exchange rate under the loan agreement, the EGP-USD rate has remained fixed for the past six months, contributing to the IMF’s decision to postpone the review. We could be looking at a 30% decline over the next year: Non-deliverable forward contracts currently indicate an expectation for the EGP to reach 32.65 / USD within three months and 41.5 / USD within 12 months.
The IMF’s anticipated review of our loan program could be delayed to Q1-2024.
The initial review by IMF experts this month will not proceed due to the government’s delay in fulfilling some of the commitments it made with the IMF under the recent agreement. An IMF team was expected to arrive in Egypt earlier this month to conduct the first review of the USD 3 bn program. The first of the review has been postponed since March after authorities didn’t meet several key conditions of the financing, including moving to a fully flexible exchange rate. (Asharq Business)
Edita inks 390 million EGP loan agreements.
Edita Food Industries has signed loan agreements to secure two seven-year medium-term loans worth a total of 390 million EGP. Worth 190 million EGP, the first loan will be used in financing 50% of the value of the acquisition deal of Fancy Foods. The second loan, which amounts to 200 million EGP, will be employed in financing the investments needed for the company’s new subsidiary Edita Frozen for food Industries, formerly known as Fancy Food. (Asharq business)
Qatari Diar launches The Residences at The St. Regis Cairo.
Qatari Diar Egypt, one of the world's leading real estate developers, has launched “The Residences” at The St. Regis Cairo. It is worth noting that the St. Regis Cairo has been launched with 1 billion USD in investments. The project aims to bolster the tourism sector in Egypt as well as boost economic development. It is set to create 5,000 job opportunities during the implementation phase, while employing over 1,000 individuals during the sustained operation of the hotel, residences, and their associated amenities. (Arab Finance)