Egypt has launched a major new initiative to support the private sector in purchasing machinery, equipment, and production lines. Announced on Sunday by Deputy Prime Minister for Industrial Development and Minister of Industry and Transport, Kamel Al-Wazir, alongside Minister of Finance Ahmed Kouchouk, the initiative provides EGP 30bn in financing to companies across key industrial sectors.
The program targets businesses in sectors including pharmaceuticals, food, engineering, chemicals, textiles, mining, and building materials, with a special emphasis on high-priority regions such as Upper Egypt, border governorates like the Red Sea, and areas along the Suez Canal, including Port Said, Ismailia, and Suez.
The initiative offers subsidized financing, with the state treasury covering the interest rate differential to help boost production capacity and contribute to economic growth. Eligible companies will benefit from an interest rate of 15% for a period of five years, starting from the launch date. The maximum financing available to each company is EGP 75m, with related parties eligible for up to EGP 100m.
The initiative encourages increased local production by offering additional interest rate reductions based on local value-added percentages. Companies that increase their local value-added by 7-10% compared to the previous fiscal year will receive a 1% reduction in the interest rate. If the increase exceeds 10%, the reduction rises to 1.5%. Companies involved in new industrial activities, particularly those with significant import volumes, will receive an additional 2% reduction.
Companies will be eligible for this financing upon obtaining a construction license, completing the construction, and opening a letter of credit for machinery or equipment imported from abroad, or providing a tax invoice for locally purchased items. Importantly, the subsidized financing cannot be used to settle existing debts with the banking sector.
Targeted Sectors and Areas of Focus
The initiative focuses on seven priority industrial sectors:
- Pharmaceuticals (active ingredients and cosmetics)
- Engineering industries (machinery, renewable energy components, electronics)
- Food industries (milk, dried fruits, and concentrates)
- Textile industries (yarns)
- Chemical industries (inks, plastics)
- Mining industries (ore preparation)
- Building materials (ceramics, marble, and pipes)
The government has outlined that the initiative will be re-evaluated based on actual increases in production, local value-added, company assets, and revenues, as well as the localization of new industries and integration into global supply chains.
Minister Al-Wazir also highlighted that the new initiative is one of three major efforts currently underway to support the industrial sector. The first initiative, launched by the Central Bank of Egypt, aims to finance the purchase of machinery and equipment across industrial sectors. The second, under study by the Central Bank, focuses on creating a fund to support struggling factories through financial contributions from banks and financiers.
Al-Wazir emphasized that companies benefiting from the previous initiative will not be eligible for the new program.
Support for Industrial Investors
The Ministry of Petroleum and Mineral Resources has also introduced measures to assist industrial investors by addressing outstanding debts. These include the repayment of overdue debts within three months for 1,700 industrial investors (representing 50% of the total clients), installment plans for new debts over up to 10 years, and the application of the Central Bank’s interest rate. Furthermore, export factories paying in foreign currency will be able to use the previous month’s exchange rate to shield against fluctuations.
For industrial facilities requesting gas connections, the cost can be paid in installments over two years, interest-free. Retrospective claims above the government rate will also be canceled, and a protocol will be established to allow industrial clients to supply used oils to the petroleum sector in exchange for debt reductions.
In addition to the immediate measures, the government is also focused on optimizing Egypt’s mineral resources. A study on phosphate ore utilization was reviewed, with recommendations to enhance manufacturing of phosphoric acid and phosphate fertilizers, improve exploration, and create a more value-added industry for both domestic and export markets.
The Ministry of Public Enterprises is also developing a comprehensive plan for Egypt’s aluminum industry, with investments totaling $260m over five years aimed at increasing production capacity, reducing imports, and expanding exports. This includes several initiatives such as new production lines, aluminum slag recycling, and solar power integration, all designed to support both the industry and Egypt’s wider economic goals.
This new financing initiative is part of Egypt’s broader strategy to foster industrial growth, boost local production, and enhance the competitiveness of the private sector. By providing targeted financial support and incentivizing local value addition, the government aims to stimulate investment in priority sectors, promote innovation, and strengthen Egypt’s position in global supply chains.
