Gov't not seeking loans to pay Suez Canal certificates: Source

CAIRO – 8 June 2018: The government does not seek loans from abroad to pay the LE 60 billion worth of investment certificates that were used to finance the Suez Canal extension project, a high-level source at the Ministry of Finance told Egypt Today on Friday.

The certificates were sold to only Egyptian nationals and corporations for a total of LE 64 billion in September 2014. The money collected was used to finance the digging of a waterway parallel to the first canal, and was known in the media as the “New Suez Canal.”

The high-profile source denied rumors circulating on news outlets that the government is seeking to borrow $5 billion from abroad to pay off the cost of the five-year certificates, assuring that the payment will be submitted by September 2019.

In the same context, banking sources said on state of anonymity that all four banks—the National Egyptian Bank, Banque Misr, Banque du Caire and the Suez Canal Bank—authorized to issue the investment certificates are regularly paying revenues worth LE 1.5 billion every three months.

In September 2014, the investment certificates were sold within eight days in Egyptian pound only, and collected a total of LE 64 billion from 1.1 million clients.

The interest rate at the time the certificates were sold was 12 percent; it was gradually increased to 15.5 percent in 2016.

In August 6, 2015, the parallel waterway to the Suez Canal was inaugurated, and hailed as a major ambitious infrastructure project that will increase the revenues of the first canal, as it will almost double the current transit capacity, and shorten the waiting times for vessels.

Additional reporting by Ahmed Yaqoub