CBE Issues Controls on Tourism Support Initiative

The Central Bank of Egypt (CBE) announced the controls for the tourism sector support initiative approved by the Cabinet recently, the most important of which is directing EGP 50 billion to companies operating in the tourism sector.

The initiative provides a maximum financing of one customer is EGP 1 billion and two billion for parties associated with a decreasing interest of 12% within the tourism support initiative. 

The Ministry of Finance also bears the interest difference in the tourism support initiative, obliging companies to sell 40% of their revenues in foreign currencies to banks to benefit from the tourism support initiative.

Last July, the Cabinet approved the final version of the document of requirements, determinants and mechanisms for the implementation of the initiative to support the new tourism sector, funded by the Ministry of Finance to encourage the tourism sector to accelerate the expansion of investment in the construction of hotel rooms, within the initiative to support the productive sectors.

It was agreed during the meeting that the amount of credit available to each company will be determined in light of its volume of business and regulatory banking rules, provided that the maximum financing per customer does not exceed EGP 1 billion or EGP 2 billion per customer and associated parties, through a maximum of two banks within the framework of the initiative.

The amount of the new tourism initiative, alone, is directed to companies operating in the tourism sector, provided that prior approval is obtained from the Ministry of Tourism and Antiquities to build and operate new hotel rooms, including expansions in existing projects, or to acquire a closed building for the purpose of converting it into a hotel facility, with the possibility of completing any constructions, equipment, or finishing of the same building within the framework of the initiative, and provided that the building did not obtain a hotel operating license previously.