Petroleum Ministry Asks NBE, BM To Arrange US$ 2 Bln Loan

The Ministry of Petroleum has submitted an official request to the National Bank of Egypt (NBE) and Banque Misr to arrange a long-term syndicated loan worth US$ 2 billion to pay part of the foreign investors’ dues which reached US$ 5.9 billion; of which US$ 1.9 billion was rescheduled.

The Ministry is still in talks with both banks to receive the loan that will be used to repay the dues of foreign partners so as to increase Egypt’s petroleum production and attract more investors in the upcoming period.

NBE received an offer from the Petroleum Ministry to arrange the loan. The bank will ask a number of international banks to contribute to the loan such as J. P. Morgan, Morgan Stanley and Bank of Tokyo. J. P. Morgan and Bank of Tokyo earlier arranged a loan worth US$ 2 billion used to finance foreign investors’ dues in 2009.

The Egyptian General Petroleum Corporation is the top authority in terms of borrowing as it is currently in talks to receive loans worth EGP 22 billion from different lenders.

It is worth mentioning that NBE and J. P. Morgan arranged US$ 2 billion loan, Arab African International Bank arranged EGP 1.5 billion loan and Société Arabe Internationale de Banque (SAIB) arranged EGP 1.8 billion to the Corporation.

Banks compete to finance the Corporation because of its repayment ability as it has strong cash flows.