Egypt approves of LE 50B financing toward tourism sector to boost hotel room capacity

Cairo – July 28, 2024: To bolster the tourism sector, the government recently gave the go-ahead to a new LE 50 billion initiative for building and operating new hotel rooms, including expansions of existing projects or converting closed buildings into hotel facilities.

These expansions are projected to significantly strengthen the national economy, generating annual revenues estimated between $1-2 billion, excluding other taxes, explained an official Cabinet statement.

The funding aims to accelerate investments in construction and finishing efforts and is subject to prior approval from the Ministry of Tourism and Antiquities.

The statement added that the initiative aligns with the Ministry of Tourism and Antiquities’ strategic vision to attract 30 million tourists, looking to increase Egypt’s hotel room capacity by 240,000 to 250,000 units.

The financing is subject to several conditions, including a maximum financing limit; companies are restricted to LE 1 billion for a single company or LE 2 billion for a client and its related parties with a maximum of two banks involved.

The initiative will prioritize funding hotel room expansions in key areas such as Luxor, Aswan, Greater Cairo, the Red Sea, South Sinai, Sharm El-Sheikh, Taba, Nuweiba, and Dahab.

Applications for the initiative will be open for one month from the launch date and will remain accessible for 12 months.

Under these terms, companies benefit from a reduced interest rate of 12 percent on a declining basis, subsidized by the Ministry of Finance to cover the difference in interest rates. This rate aims to incentivize swift deployment and commencement of services for the newly constructed hotel rooms.

The initiative is projected to create approximately 45,000 new direct and indirect job opportunities, contributing to the government’s efforts to reduce unemployment rates through increased private-sector investment.

The funding is not to be used for repaying existing debts within the banking sector, the government emphasized, stressing its focus on expanding Egypt’s tourism infrastructure.

The initiative also supports the development of new tourism products, leveraging Egypt’s cultural heritage and historical sites.