? The Federation of the Egyptian Industries (FEI) is urging the Finance Ministry to swiftly activate the first phase of the new EGP 30 bn initiative to support companies in priority industrial sectors, with a number of industrial chambers complaining from a delay in implementing the initiative and providing the needed finance, industry insiders told EnterpriseAM.

The Industry Ministry launched the first phase of the new EGP 30 bn financing initiative back in April, offering reduced 15% interest rates to seven priority industrial sectors, including the pharma, food, engineering, chemicals, textiles, mining, and building materials. The initiative, which was announced in December, aims to help private players finance the purchase of new machinery, equipment, and production lines at the discounted rate for five years. Some projects will get an even more favorable rate, with an additional 2% cut for projects that boost local added value or introduce new industrial activities that could replace imports.

Despite being officially launched three months ago, “the initiative has not yet come into effect, despite the chamber notifying its affiliated factories, which have completed all required paperwork and requirements and finalized all bank requests within the initiative, Chamber of Engineering Industries head Mohamed El Mohandes told EnterpriseAM. He attributed that delay to the Finance Ministry, which has not yet allocated the funds or disbursed the necessary credits for each factory.

But there’s disagreement on the reason for the delay, with the Finance Ministry “waiting for the complete list from the Industrial Development Authority to start the disbursement," an official from the ministry told us.

The pharma sector is one of the most affected industries. "We have a large list of company requests, exceeding 100 factories, awaiting approvals to obtain the required financing… They [the government] told us that the pharmaceutical sector will be prioritized, but so far, not a single factory has received any of its allocated funding," a source from the FEI’s Pharmaceutical Industries Chamber told us.

These companies are awaiting financing worth EGP 7.5 bn, while the engineering, food, chemical, apparel, and building materials sectors will share the remaining of the funds allocated for the first phase.

“Between 50 and 60 new factories are awaiting the activation of this initiative after having completed establishment and construction procedures. The process is stalled on the purchase of machinery and equipment due to the currently high dollar valuation,” FEI’s member Mohamed El Bahy told EnterpriseAM. Therefore, this initiative will help these factories that are hit hard by the high exchange rate to start operations.

Under the initiative, factories will not receive cash-in-hand nor direct financing and as the funding will be instead used to purchase production lines, machinery, and equipment, according to El Mohandes, who called for action, even if gradual, to disburse funds to factories that have met all conditions.

ICYMI- The government last year suspended a EGP 120 bn program for industrial and agricultural players that it had approved in March after the initiative ran into difficulties and reportedly benefitted only a few industrial players.