A consortium led by National Bank for Development, Bank Audi, Banque Misr and Arab Banking Corporation are set to offer an Islamic Sharia-compliant finance with value of EGP 1.2 billion for Al-Nouran Sugar Company.
Sources familiar with the matter told Amwal Al Ghad that the consortium plans to sign a memorandum of understanding with the company this week after a fierce competition with some banks mainly National Societe Generale Bank (NSGB), the financial consultant of the company. After Islamic Bank for Development shared with US$ 25 million in Al-Nouran Company’s capital, it is decided that the finance will be compliant to Islamic sharia law.
Central Bank of Egypt (CBE) did not allow Islamic banks to offer Ijara services (Islamic lease) in financing companies. Accordingly, the finance process will be through finance lease companies; including the International Company for Leasing (Incolease) and Segolease, Sources said.
If NSGB will participate in the consortium, the lender will only be able to finance machinery and equipments, but the project’s infrastructure will only be given sharia-compliant fund.
The 8 to 10-year loan syndication will finance the establishment of a sugar factory in Salhia City in Sharkia governorate. The volume of the project’s investments is EGP 1.9 billion. The project will start production after three years producing 250 thousand tons annually.
Industrial Development Authority approved Al-Nouran Sugar Company’s establishment of a factory in Salhia City in Sharkia Governorate in the third quarter of 2010.
It is worth mentioning that Al-Nouran Holding Company is an importer, exporter, marketer and distributer of goods; mainly raw materials and white sugar.
Total sugar production in Egypt is 1.7 million tons, while the consumption volume is 2.7 million tons, meaning that Egypt imports a million ton of sugar, according to a study prepared by Industrial Development Authority.