ANNOUNCEMENT 22 Dec 2016

On 22 December 2016 Banque Misr, a state-owned bank, announced that it had signed a cooperation protocol with Al-Kahira for Urban and Industrial Investment and Development.

 

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

Banque Mirs (2016) Banque Misr Funds Leather Production Development Project. English. http://www.banquemisr.com/en/about-us/press/leather-production

State Information System (2016) 95% of 1st phase of leather city completed – min. English.
http://www.sis.gov.eg/Story/103133?lang=en-usI

Daily News Egypt (2016) First phase of developing Al-Robeky city for leather costs EGP 840m. English. http://www.dailynewsegypt.com/2015/12/29/first-phase-of-developing-al-robeky-city-for-leather-costs-egp-840m/

Inception date: 22 Dec 2016 | Removal date: open ended

State loan

On 22 December 2016, Banque Misr signed a cooperation protocol for Urban and Industrial Investment and Development, with the company behind the Robiki Leather City Project, Al-Kahira (i.e. a project which total cost up to 2016, has been estimated at USD 72 million).

The signed protocol establishes that Baque Misr will:

  • finance the renovation of the company's machinery and equipment, 
  • finance the company's endeavour to purchasing additional: space, small and medium-sized workshops, as well as commercial and office units for investors.

The interest rate, although not specified in the official statement of the Bank, it was announced will be low (according to the rate set by the Central Bank of Egypt). Furthermore, the official statement of the Bank states that the financing will be provided for a period ranging from 1-10 years as well as with a two-year grace period ( beginning as of the date of the loan delivery). The total monetary amount of the loan is not disclosed in the official statement of the Bank.

 Furthermore, the official statement of the Bank states that ''Banque Misr's financing of the project stems from its commitment to providing economic and social support, thereby allowing the national economy to flourish and boosting production, as well as providing job opportunities for the youth in order to raise the living standards for individuals and drive future growth''.

Al-Kahira is the company behind the Robiki Leather City Project ( i.e. a project which aims to bring all the Egyptian tanneries in one single industrial complex situated in the governorate of Menoufia). The total cost of the Robiki Leather City Project in its first development phase was 840 million Egyptian Pounds (circa USD 55 million). Furthermore, the government invested additional 330 million Egyptian pounds (circa USD 17 million) in 2015/16.

Banque Misr is one of the leading state-owned banking institutions of Egypt.

A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. On this metric, the state aid proposed here is discriminatory.

AFFECTED SECTORS