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CBE raises hotel renovation support initiative’s to up to 90% of total cost

The CBE will finance a maximum of 90 percent, instead of the predetermined 75 percent of the total replacement and renewal costs

By: Business Today Egypt

Wed, May. 19, 2021

The Central Bank of Egypt (CBE) is changing several points in regards to the financing in their tourism renovation initiative.

The CBE will finance a maximum of 90 percent, instead of the predetermined 75 percent of the total replacement and renewal costs.

This is dependent on the customer bearing the remaining percentage with the payment of the customer’s share, in a proportion proportional to the bank’s share, based on the cash flows for each client.

It also decided to amend some provisions of the initiative to finance the replacement and renewal of accommodation hotels, floating hotels and tourist transport fleets at a decreasing rate of 8 percent,

The amendments included that the credit risk guarantee company guarantees 70 percent instead of 60 percent of the credit risk for the facilities granted, provided that banks bear 30 percent instead of 40 percent before asking the company to disburse the guarantee.

The CBE also included changes to its financing support for the payment of salaries and wages of tourism workers in Egypt, as well as the basic maintenance and operation expenses, with a guarantee provided by the Ministry of Finance of LE 3 billion at a decreasing rate of 5 percent.

The initiative has also been extended until the end of December 2021, instead of from the previously specified period in June 2021, or until the fund has been depleted.

Its grace period has also been extended to June 2022, provided that the first installment begins in July 2022 and for a period of two years after that, with no requirement for customers to achieve profits during the past years.

Those that have previously benefited from the initiative since its issuance can benefit from, provided that the maximum total funding within the framework of the initiative does not exceed the amount of LE 30 million for the client and LE 40 million for the client and related parties, regardless of the number of months that have been funded.

Each of the Egyptian joint-stock companies operating in the field of tourism, to which the terms of the initiative meet, will benefit from the initiatives, regardless of the percentage of the foreign partner.