Circular dated March 15, 2021 regarding financing gas dues from ceramic companies within the private industrial sector initiative

Cairo on: March 15, 2021
To: The Honorable Chairman of the Board of Directors of the Bank

Greetings,

With reference to the initiative for financing the private industrial, agricultural, and contracting sectors issued on December 12, 2019, and its amendments, through which an amount of 100 billion EGP is made available through banks at an interest rate of 8% calculated on a declining basis, which allowed the use of granted credit facilities to pay for electricity, gas, and diesel expenses.

In light of the meetings held by the Ceramic and Porcelain Sector with the Ministry of Petroleum and Mineral Resources and natural gas companies, and the decision of Dr. the Prime Minister regarding rescheduling the existing debt of ceramic and porcelain companies in favor of natural gas companies over 10 years, provided that these companies pay an advance payment equivalent to 25% of their natural gas withdrawal arrears in addition to the estimated monthly value up to withdrawals of February 28, 2021. In the same context, and to support the sector, a series of meetings were held with companies representing the sector, where it was agreed to finance the aforementioned advance payment through dealing banks.

In light of the above, the Board of Directors of the Central Bank of Egypt, in its meeting held on February 21, 2021, decided the following:

Allocating a tranche of 1.2 billion Egyptian Pounds from the amount allocated to the private industrial, agricultural, and contracting sector initiative at an interest rate of 8%, to finance the advance payment through dealing banks for companies operating in the field of ceramic and porcelain wishing to reschedule the repayment of their natural gas debts, with the condition that this payment be transferred directly to natural gas companies, according to the following determinants:

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-1 Companies must submit all documents indicating the agreement with the Ministry of Petroleum and Mineral Resources and natural gas companies, specifying the value of the advance payment, as well as excluding 50% of the value of late fees due on the natural gas debt until December 31, 2019.
-2 Ensuring the companies' ability to service the debt (installments/interest) through future cash flows.

Please be kind enough to alert regarding taking the necessary action in this regard as of this date.

Tarek Amer