Sharm El-Sheikh economic projects in trouble

Mohamed Ayyad
2 Min Read

Prime Investment Bank agreed with the European Bank for Reconstruction and Development (EBRD) to finance feasibility studies for a dry transfer project among the Sharm El-Sheikh Economic Summit projects that are still suspended, according to CEO of Prime Holding Mohammed Maher.

“Government agencies refuse to finance the feasibility studies and have no allocations for them,” Maher said. In coordination with the Ministry of Transport, there is an agreement with the EBRD to finance a feasibility study for a dry transport project.

Investment banks, including Prime, HC, Pharos, and Beltone, were promoting several projects that were initially signed with memoranda of understanding (MoUs) during the Economic Summit in March, with investments estimated at about EGP 250bn. These MoUs have not been turned into contracts until now.

The timeline for investment banks for promoting and marketing for these projects ended in September without converting the MoUs to contracts. Maher denies that Prime was delayed in marketing, noting that the problem is that government authorities have not funded feasibility studies.

He said Prime promotes several projects affiliated to the Ministry of Transport, including dry transport project among others. They will work on feasibility studies for such projects but the investors who will implement the project will bear their costs.

According to an official source at the Ministry of Investment, Minister Ashraf Salman will meet with the investment banks within days to discuss the fate of these projects. Investment banks’ efforts in preparing these projects are currently being evaluated since the Sharm El-Sheikh Summit to resolve the possibility of the renewal of some projects at the expense of others.

The government set the commission for investment banks in the promotion of projects of the Economic Summit at 1% in case of success of covering finances through contributions. This commission reaches 5% of financing value in case of coverage by bank financing.

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