Investments for Suez Canal project reach LE39.5 billion in first week

The governor and chairman of Egypt’s Central Bank, Hesham Ramez, stated in an interview with the privately owned Al-Masry Al-Youm that LE39.5 billion worth of investment certificates were sold within the first week of opening investments.

The certificates are issued by the Suez Canal Authority with guarantees from the Ministry of Finance. Four public banks, namely the National Bank, Banque Misr, Cairo Bank and the Suez Canal Bank, have contracts to issue the certificates to interested buyers. Since Sunday, private banks have been able to issue certificates at the request of customers.

The investment certificates will fund a project whereby the canal will be extended and deepened by a total of 72 kilometers. In his announcement of the project last month, President Sisi emphasized that he wanted the project to stay local as matter of national security. Last week, Sisi ratified a law that allowed the Suez Canal to issue investment certificates through Egyptian banks, which would allow the project to be funded through small local investments. 

In an interview with Arabic Reuters, Ramez stated that 90 percent of Egyptian individuals and 10 percent of Egyptian institutions had bought investment certificates. The certificates were first made available for sale last Thursday, and buyers purchased LE6 billion worth on the first day.

According to a report in the state-owned Al-Ahram, Egyptians abroad have also been eager to buy the investment certificates. Banque Misr branches abroad have received requests from Egyptians in the Emirates, Lebanon and Paris for the certificates. 

Egypt aims to raise LE60 billion worth of investment certificates in order to fund the excavation, roads and tunnels of the project. If buyers continue to purchase certificates at this rate, the canal extension will be fully funded in less than two weeks.

The non-tradable certificates range in value from LE10 to LE1,000 with a 12 percent interest rate and are exempt from taxes and administrative fees.

Ramez previously stated that the Suez Canal expansion is expected to generate US$13.5 billion in revenue by 2023, compared to $5.3 billion last year.

However, the new Suez Canal extension has met with some criticism. According to a Guardian article published last week, around 1,500 people’s homes have been destroyed to create space for the extension and 5,000 more are under threat. The Guardian reported that thousands have been evicted and none of them have received compensation for the loss of their homes.