$100m easy loan from JBIC to modernise local industry
Egypt-Japan, Economics, 3/13/2002

Japan Bank for International Cooperation (JBIC) has announced its intention to provide a $100m easy loan as a first stage to be used in a programme to modernise and upgrade the Egyptian industry and to assist industrial companies to carry out their plans of modernisation.

Minister of Industry and Technology Ali al-Saidi, said after a meeting with a JBIC delegation yesterday that the bank's representatives said they were completely convinced of the modernisation programme of the industry and expressed readiness to contribute to that ambitious effort.

Chairman of the Export Development Bank of Egypt (EDBE), Mahmoud Mohammed, said that the loan would be available to industrialists after completion of formalities.

They could use it in importing Japanese equipment and machinery they need to modernise their factories at a low interest rate and a repayment period over five to ten years with a grace period of six months after operation. Priority would be given to the export-orientated factories.

"The Japanese line of financing will integrate with the similar financing lines like those offered by the EDBE and the European Bank for Investment," he said.

Meanwhile, head of the Federation of the Egyptian Industries (FEI), Abdul-Monem Saudi, said the loan was a direct result of the meetings of the Egyptian-Japanese Business Council, held in Tokyo last year as the Council was working to provide all mechanisms necessary to activate bilateral economic cooperation between the two countries including easy financing lines to the Egyptian private sector.

He added that the Council had submitted a request to the JBIC governor who welcomed the proposal. A working group was then set up to study the various means of cooperation and to identify the Egyptian banks through which the loan would be provided.

He said that there were various financing lines offered to the Egyptian industrial sector by international aid development banks such as the Japanese and Korean development banks, the European Investment Bank, the German Reconstruction Bank, the World Bank, the USAID Commodity Financing Programme, the Italian aid financing programmes and others.

Saudi noted that arrangements were underway to establish a specialised unit at the Federation of Egyptian Industries to help companies and factories choose the best financing line according to the size of the project, the volume of the required funding, the country of origin of the necessary equipment and the required guarantees.

"In other words the planned unit will function as a link between the factories and the financing agencies and will also work eliminate any obstacles that might arise in the process," he added.

Saudi said that the Council had made great progress during his working period in the past two years represented in a number of big projects including one for manufacturing electronic telephone exchanges in Egypt jointly by a big Japanese firm and the Arab Industrialisation Organisation.

The production of the project would replace the country's imports in that field and half of it would be exported, he added.

He noted that the FEI was studying the possibility of repeating the same form of deals with other Japanese companies to contribute to the efforts aimed at modernising the Egyptian industries. It would as well help in the development of small and medium industries to raise the rate of local components in these industries.

He said that cooperation with the Japanese side was expected to extend to the transportation sector, noting that Saidi, who was also acting Minister of Transport, had discussed with the JBIC representatives the possibility of financing the third stage of the Cairo underground metro and the upgrading programmes of Egypt's railways.

Secretary - general of the Egyptian Japanese Business Council, Alaa Izz, said that they had to contact the giant Japanese companies, bank chairmen and business organisations to acquaint them with the priorities, incentives and advantages of investment in Egypt.

The Council had also managed to provide a host of scholarships for Egyptian industrialists to take advantage of the Japanese technical aid for developing their products in order to cope with the standard specifications of the Japanese products.

The Council's plan also included organising a number of conferences in Japan in a bid to attract Japanese investments to Egypt in co-operation with the JBIC, the Japan Investment Institute and the UN Industrial Development Organisation (UNIDO), he added.

Previous Stories:
  Ebeid discusses Japan's contribution to promotion of Egyptian exports   (3/11/2002)
  Japan offers $ 100 m in soft loan to upgrade Egypt's industry   (3/11/2002)
  Japan increases investments in Egypt, trains cadres in tourism   (2/11/2002)

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