Shut up and take my money
Have another USD 1 bn: Egypt may be taking out a bigger bank loan than previously disclosed thanks to heavy appetite from lenders lining up to participate in a USD 3 bn facility from a group of international banks — that’s USD 1 bn more than originally anticipated, Reuters reported yesterday, citing sources familiar with the transaction.
Part-green, part-Islamic: The facility, which is being arranged by First Abu Dhabi Bank and Emirates NBD, will partly be used to fund green ventures and partly channeled into Shara-compliant projects. Local press reports last week suggested that the loan would be split 50/50, with USD 1 bn being allocated to ESG projects and USD 1 bn going to Sharia-compliant investments. It’s unclear how the USD 3 bn loan would be divided.
Back for more: Egypt took out a USD 2 bn 12-month loan arranged by the two Gulf lenders in 2020, which it finished repaying earlier this year. The loan was taken out plug budget shortfalls and support the economy through the covid crisis, and was divided into a USD 1.5 bn conventional tranche and a USD 500 mn Islamic tranche.
Different terms: The new facility would be repayable over three-years, according to Reuters’ sources.
No confirmation on who’s involved: Sources told Reuters that a mixture of standard and Islamic banks are involved in the transaction but didn’t disclose names. Local media said last week that 10 banks were involved: Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Mashreq Bank, Bank ABC, National Bank of Kuwait, Ahli United Bank of Kuwait, Al Ahli Bank of Kuwait and Italy’s Intesa Sanpaolo Bank, in addition to the lead arrangers.
What’s next? After the loan is finalized with the banking syndicate, it will head to the House of Representatives for approval.