China to finance majority of new Egypt capital's tower district

Cairo

CHINESE banks will provide 85 per cent of the funding needed for the US$3 billion skyscraper-studded portion of Egypt's new capital which is being developed by the China State Construction Engineering Corp, a senior official with the state-run company said on Sunday.

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

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.

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 and 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 Egyptian 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 former president Hosni Mubarak.

Egypt's military holds a 51 per cent stake in the project, with the Housing Ministry taking the remaining stake. BLOOMBERG