Circular dated December 6, 2020 regarding amending some items of the initiatives to replace and renew hotels and finance the payment of salaries, with the guarantee of the Ministry of Finance

Cairo: December 6, 2020

Dear Mr. Chairman,

Greetings,

With reference to the Central Bank of Egypt initiative issued on January 8, 2020, and its amendments, which provided an amount of 20 billion EGP through banks at a declining interest rate of 8% to finance the replacement and renewal operations required for accommodation hotels, floating hotels, and tourist transport fleets; and to the item added to the initiative on March 20, 2020, which allowed banks the ability to grant credit facilities repayable over a maximum period of two years and a grace period of 6 months starting from the date of disbursement, during which returns are capitalized to settle salaries, wages, existing liabilities to suppliers, and maintenance works for activities operating in the tourism sector.

And with reference to the initiative to finance the payment of salaries and wages of workers in the tourism sector with the guarantee of the Ministry of Finance, issued on June 16, 2020, and its subsequent circular letters, through which a tranche of 2 billion EGP was allocated, with the aim of granting credit facilities to companies operating in the tourism sector to settle workers' dues starting from the month of [missing text], such that at least 20% of the facilities is allocated with a maximum of fifteen thousand EGP per worker monthly for six months from the date of granting credit facilities to customers to pay salaries and wages of insured workers.

In light of the above, and given the continued impact of the coronavirus pandemic on the tourism sector, and the desire of the Central Bank to continue supporting the sector and its workers until the current crisis is overcome, given the sector's importance to foreign currency reserves and as one of the pillars of the economy and a source of [missing text], the Board of Directors of the Central Bank of Egypt has approved, in its session held on November 20, 2020, the following:

First: Amendment of the grace period stated in the fact that the period does not exceed 6 months starting from the date of disbursement, during which returns are capitalized, in the initiative for settling salaries, wages, and existing liabilities to suppliers and maintenance works for tourism activities included in the initiative, within the framework of the hotel replacement and renewal initiative (at a declining interest rate of 8%), to become a grace period ending on December 13, 2023, during which returns are capitalized, with the first installment becoming due in January 2024 (regardless of the date of disbursement).

Second: Amendment of Item (7) included in the initiative regarding the settlement of salaries and wages of workers in the tourism sector with the guarantee of the Ministry of Finance, issued on June 16, 2020, and amended on June 20 and November 20, 2020, regarding the maximum limit for the salary of one worker monthly, to become twenty-five thousand Egyptian Pounds (instead of fifteen thousand Egyptian Pounds).

Third: The First Item shall apply to new and previously granted facilities within the mentioned initiatives, while the Second Item shall apply to facilities granted from its date.

This is while the remaining conditions of the two initiatives remain in effect as they are, in matters not addressed by this text.

Please accept our highest respect,

Tarek Amer