Egypt launches EGP 1bn fund to revive struggling factories
Egypt’s central bank and industry ministry launched a 1 billion Egyptian pound ($19.1 million) fund on Thursday to restructure struggling factories and industrial firms and revive viable production capacity.
The Distressed Factories Restructuring Fund will take equity stakes in financially or operationally troubled industrial businesses with viable prospects, working with them on restructuring plans to restore efficiency, support sustainable growth, and increase their long-term value, the central bank and ministry said in a joint statement.
Central Bank of Egypt Governor Hassan Abdalla and Industry Minister Khaled Hashem announced the fund’s launch during a meeting at the central bank’s headquarters attended by representatives of participating banks and other officials.
“The launch of the Distressed Factories Restructuring Fund is an important step in the state’s efforts to support the industrial sector and enhance its contribution to gross domestic product and economic growth,” Abdalla said.
The fund will help direct capital towards rehabilitating productive assets and unlocking production capacity with potential for sustainable growth, he said.
Egypt’s banking sector will remain committed to supporting investment and production and finding solutions to restart struggling factories through diversified financing channels, Abdalla added.
Hashem said restructuring and restarting struggling factories was a priority for the Industry Ministry as part of efforts to boost domestic production and improve the efficiency and sustainability of the industrial sector.
The fund forms part of a broader government initiative to support struggling factories, he said.
Factories seeking support will apply through the ministry’s recently launched manufacturer support system, which will assess companies seeking financing through the fund, Hashem said.
The fund is expected to restore unused production capacity, create jobs, strengthen local supply chains, and improve the competitiveness of Egyptian industry, he added.
It will focus on factories and industrial businesses facing financial or operational difficulties but possessing assets and production capacity that can be developed, according to the statement.
Its specialised team will work with beneficiary companies on restructuring plans that could include loan restructuring, new capital injections, operational improvements, and stronger governance frameworks.
The measures aim to restore production efficiency, preserve jobs, and strengthen the competitiveness of Egypt’s industrial sector, the statement said.
The fund will be managed by CI Capital, with participating banks investing in it, including the National Bank of Egypt (NBE), Banque Misr, Arab African International Bank (AAIB), Agricultural Bank of Egypt, and Export Development Bank of Egypt (Ebank).
Mohamed El-Sewedy, chairman of the Federation of Egyptian Industries, will head the fund’s investment committee.