New Cairo FC sets tone for Egyptian PPP programme

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The lessons learned at New Cairo could have an important impact on the timing of future Egyptian PPPs.

The signing on 4 February of the direct agreement between the lenders to the 250,000m3/d New Cairo wastewater project and the project sponsors marked the conclusion of a key milestone in Egypt’s first major privately financed wastewater deal. A club of four Egyptian lenders – National Société Générale Bank (33%), Commercial International Bank (33%), Arab African International Bank (17%) and Ahli United Bank Egypt (17%) – is providing EGP566 million ($103 million) of 15-year debt at a fixed margin, understood to be in excess of 300 basis points over the Central Bank of Egypt’s lending rate. NSGB acted as the facility agent.

The 50:50 developer consortium of aqualia and Orascom Construction Industries was granted a one-month extension to the tight six-month window for financial close set out by the Egyptian Ministry of Finance when the 20-year build-own-operate-transfer contract was awarded in June 2009.

Sources in Egypt now believe that the time windows allocated for financing the larger upcoming wastewater BOOTs, such as those at Abu Rawash, Alexandria West and Helwan, will have to be lengthened. The financing risk associated with Egypt’s wave of new wastewater PPPs is one of a host of issues which the new national PPP law is expected to address.