Egypt has raised the $8.5 billion it needs to fund a project to expand the Suez Canal in just eight days, the central bank governor said.
Hisham Ramez said in a telephone interview with Reuters that EGP61 billion had been raised after banks issued investment certificates to finance the project, which is aimed at expanding trade along what is the fastest shipping route between Europe and Asia.
Fund-raising has closed and Egyptians will no longer be able to buy the investment certificates now that the initial goal of 60 billion pounds has been exceeded, the governor said.
The Suez Canal project includes the development of 76,000 sq km around the canal into an international industrial and logistics hub to attract more ships and generate income.
Revenues
Officials have said the new development would boost annual revenues from the Suez Canal, which is operated by the state-owned Suez Canal Authority, to $13.5b by 2023 from $5b currently.
Canal revenues are a vital source of hard currency for the country, which has suffered a slump in tourism and foreign investment since the 2011 uprising that toppled long-time ruler Hosni Mubarak.
The five-year investment certificates have a 12 percent interest rate and pay quarterly dividends and came in 10, 100 and 1,000 Egyptian pound ($1.40-$140) denominations.
National Bank of Egypt, Banque Misr, Banque Du Caire, and Suez Canal Bank issued the certificates.
The banks also issued certificates in US dollars with a 5.3 percent interest rate and quarterly dividends, in $1,000 denominations.
Egypt’s challenging economic environment has led officials to refocus their efforts on expanding and upgrading the canal. Estimates suggest that revenue from the waterway could increase to $13.5b once the work is completed, although some aspects of the project, including its location, have come under criticism.
Improve Efficiency
Egypt’s army will coordinate the work on the initiative, known as the Suez Canal Corridor Development Project, which was launched on August 5 by President Abdel Fattah Al Sisi. The initiative will involve 35km of dry digging and 37km of “expansion and deepening”, according to Mohab Mamish, the head of the Suez Canal Authority. This will see the canal’s waterway widened, creating a much longer stretch of “dual carriageway” where ships can pass more easily.
The expansion should lead to increased efficiency as well as a reduction in the maximum waiting time from 11 to three hours. The number of passing ships that can be handled daily will almost double to 97.
Various press reports have said the forecast time scale for the expansion has been reduced from five years to three years and eventually to an unlikely 12 months.
