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Abu Dhabi, UAEMonday 18 June 2018

Chinese banks to pay for slice of Egypt's new capital

New administrative capital is one of President Abdel Fattah El Sisi’s flagship mega-projects

New capital is one of Egyptian President Abdel Fattah El Sisi's mega projects.  AFP/Timothy Clary
New capital is one of Egyptian President Abdel Fattah El Sisi's mega projects. AFP/Timothy Clary

Chinese banks will provide 85 per cent of the funding needed for the $3 billion tower-studded portion of Egypt’s new capital which is being developed by the China State Construction Engineering (CSCEC), a senior official with the state-run company said Sunday.

Egypt’s Housing Ministry is responsible for the remaining 15 per cent of costs not covered by the Chinese banks, Zhao Qiang, CSCEC Egypt’s deputy general manager, said in an interview with Bloomberg.

He said the company is negotiating with several local contractors, but declined to provide additional details. The business district is slated to include 20 high-rises and a 385-metre-tower expected to be the tallest in Africa

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Egypt will be given a grace period of 36 months to 42 months - until construction is completed - before repayment begins on the 10-year loan, Assistant Housing Minister Khaled Abbas said. Loan terms are still be negotiated, but the interest rate is expected to be between 2 per cent to 3 per cent, he said, adding that the Housing Ministry’s portion is also backed by a sovereign repayment guarantee.

The new administrative capital is one of President Abdel Fattah El Sisi’s flagship mega-projects - a venture aimed at creating from ground-up a state-of-art city to which government ministries and other services would be relocated.

The project was unveiled as Egypt embarked on a series of sweeping changes aimed at reviving an economy battered after the 2011 uprising that toppled Hosni Mubarak. Egypt’s military holds a 51 per cent stake in the project, with the Housing Ministry carrying the remaining stake.