The details of the EGP 50 bn subsidized loan program for hospitality players

The cabinet greenlit the ins and outs of the subsidized loan program for hospitality companies worth up to EGP 50 bn, according to a cabinet statement. The funds will go into helping companies build and operate new hotels, expand existing properties, and repurpose buildings into hotels.

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ICYMI- The tourism and finance ministries had agreed to launch the initiative back in April offering subsidized loans to local and foreign hospitality players looking to set up more hotel rooms across the country.

The details: The new program will offer financing at a reducing interest rate of 12%. Individual companies can access up to EGP 1 bn, while those with affiliates may receive up to EGP 2 bn, provided by a maximum of two banks. The exact amount of credit extended to each company will depend on its size and banking regulations.

The program will only finance projects in the following areas, listed in order of priority: Luxor, Aswan, Greater Cairo, the Red Sea governorate, and parts of South Sinai — namely Sharm El Sheikh, Taba, Nuweiba, and Dahab.

Part of a wider support program: Subsidized by the Finance Ministry, the initiative is part of a broader support program. The government in April approved an EGP 120 bn program that offers loans to industrial and agricultural players at a subsidized 15% interest rate, well below the CBE’s 28.25% lending rate.

The timeline: Companies can apply for financing one month after the launch of the initiative, which has a 12-month application window and they will have 16 months from the initial disbursement to access the funds, with the final deadline for the program set for 30 June 2026. Companies will need to secure a hotel operating license within six months of the end of the fund withdrawal period.

The end goal: The government aims to attract some25 mn touristsannually by 2028. To that end, it plans to add some 240-250k rooms to existing hotel room capacity, the statement reads. That’s at least 20% more than the 200k hotel rooms that were initially planned.

The payoff could be substantial: Every 15k hotel rooms can generate USD 1-2 bn in annual revenues, alongside EGP 1.5-2 bn in value-added tax and other taxes, and create around 45k new direct and indirect jobs, the cabinet statement reads.