The Central Bank of Egypt (CBE) will allocate EGP 1.2bn to finance the unpaid natural gas bills of ceramics and porcelain companies in the country.
It aims to finance the advance payment of those companies that wish to schedule their utility dues, provided that this tranche would be transferred directly to those companies.
The financing is part of the government’s allocation of EGP 100bn for the private sector, with a return of 8%.
In a letter to the banks published on its website, the CBE said that companies wishing to benefit from this initiative must present all documents indicating the agreement with the Ministry of Petroleum and Mineral Resources and natural gas companies.
These documents should present a determination of the value of the advance payment, as well as excluding 50% of the value of the late interest of on natural gas debts until 31 December 2019. It must be ensured that these companies are able to pay the debt through future cash flows.
The CBE launched an initiative to finance the industrial, agricultural, and contracting private sector on 12 December 2019. A total of EGP 100bn would be made available through banks at an 8% interest rate, calculated on a diminishing basis.
Credit facilities granted through that initiative were allowed to be used to repay electricity, gas and diesel expenses.
According to the CBE, meetings have been held during recent days by the Ceramic and Porcelain Division with the Ministry of Petroleum and Mineral Resources and natural gas companies.
Prime Minister Mostafa Madbouly decided to reschedule the debts on more than 10 years of these companies.
This would take place on the condition that those companies pay an advance payment equivalent to 25% of the arrears of its natural gas withdrawals. The payment would take place in addition to the estimated monthly value, and was valid until 28 February 2021.
Madbouly explained that within the framework of supporting the sector, a series of meetings were held with the companies representing the division, as it was agreed to finance the advance payment through the concerned banks.