New financing facility for small and medium-sized Egyptian enterprises

Through the new financing agreements signed in Cairo on November 17, the European Investment Bank is providing up to 25 million ECU in risk capital facility to finance modernization and restructuring in private Egyptian undertakings.

The funds will be channeled as equity capital through leading Egyptian banking and investment institutions. The aim is to provide small and medium-sized enterprises in Egypt with innovative funding products. The remuneration of the investment will be based on the operating results of the company, and is to be reimbursed in Egyptian pounds at the end of the operation.

The financial instruments to be used include ordinary shares, preferred shares, convertible bonds, investment certificates and any others whose return is linked to a company's performance.

The new loans bring total EIB financing to Egypt, since 1978, to 1.3 billion ECU. Special emphasis is given to supporting industrial development through financing large-scale industrial schemes and to global loans to the banking sector to provide loans to small to medium enterprises investing in long-term projects.