The Egyptian General Petroleum Corporation (EGPC) will offer a global tender for a $1.5bn loan aimed at covering a certain amount of the country’s debts to foreign oil and gas companies before the end of 2014.
The tender is required in US dollars and will be offered to global and local banks this November, said Tarek El Molla, Chairman of the EGPC.
El Molla added that the loan will not be assigned to local or global banks to be marketed to other banks.
He also said that that the ministry hopes to pay nearly $1bn of debts due to foreign partners by the end of this year, in addition to the $1.5 billion paid last month.
The aim of this process is to encourage foreign investments in the Egyptian oil sector, according to El Molla.
The Minister of Petroleum previously signed an agreement with the National Bank of Egypt (NBE) alliance for a loan worth EGP10bn.
The loan includes a dollarised portion of $500mn to be paid within four years with a one-year grace period. Egypt also signed a deal for EGP 6.4bn which must be paid within five years with a one-year grace period to the Misr Petroleum and Co-op Petroleum companies, both owned by the Petroleum Authority.
The NBE alliance’s proposal was the best among the national banks that applied for the tender to arrange the loan – one of the largest offered by banks.
The bank alliance formed to fund the loan includes NBE as a financial representative, Commercial International Bank (CIB), Arab African International Bank, Banque Misr, and Qatar National Bank ALAHLI (QNB AlAHLI).
Debts owed to foreign partners amounted to $5.9bn by the end of last September, according to El Molla.
He noted that foreign banks along with local institutions will present offers in the tender that will be launched this month, as they have confidence in the Egyptian economy and Egypt’s ability to pay its debts.
