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With Joint Financing Amounting to EUR 152 Million, Banque Misr is Lead Arranger and Financing Marketer – in Collaboration with NBE – in Arranging a Syndicated Loan in Favor of WOTECH
22/09/2021
A banking alliance comprising Banque Misr – as lead arranger, financing marketer, technical and revenue account bank, the National Bank of Egypt – as lead arranger, financing marketer, guarantee agent and financing coordinator and Banque du Caire – as lead arranger, marketer and financing agent – completed the arrangement of a syndicated loan valued EUR 152 million in favor of WOTECH – a subsidiary of the Petrochemicals Holding Company. The funding aims to establish a plant for manufacturing MDF wood, using rice straw as a raw material. The signature ceremony was attended by bank leaders and teams, together with the leadership of both the Petrochemicals Holding Company and WOTECH.
 
Mr. Mohamed El-Etreby – Chairman of the Board of Banque Misr – reiterated the Bank’s continuous support of environmentally-friendly projects, which are aligned with the state’s policy of conclusively resolving the annual “black cloud phenomenon”. As such, the funding aims to establish a plant for manufacturing MDF woods at a production capacity of 205 thousand cubic meters / year in the city of Edko, Beheira governorate, at a total investment cost of some EUR 217 million. He further noted that Banque Misr endorses various national projects that directly impact citizens, stating that said project is set to create up to 2,000 employment opportunities. The company also targets exporting around 50% of its production, which will also contribute to securing foreign currency. The share of each participating bank is approximately EUR 51 million and the total financing period extends to 9 years; including two years within which the company is allowed to withdraw the funding, with payment beginning at the end of that duration.
 
On his part, Mr. Hisham Okasha – Chairman of the Board of NBE – stated that this endeavor constitutes a national project that targets curbing environmental pollution, which emanates from burning large quantities of rice straw, while transforming this problem to an investment opportunity. This is by developing petrochemical projects in Egypt that positively reflect on the national economy and maximize added value from Egyptian exports, together with alleviating the pressure on foreign currencies. Mr. Okasha reiterated the growing role of NBE in financing projects and syndicated loans in collaboration with local and global banks and financial institutions; thus reflecting the trust in NBE, which has acquired advanced rankings in this domain – both locally and regionally – for a number of consecutive years.
 
Mr. Tarek Fayed – Chairman of the Board and CEO of Banque du Caire – said that the banking alliance has succeeded in seizing the opportunity of arranging and marketing the financing, in the midst of competition posed by other alliances comprising local and foreign banks and financial institutions. He reiterated that the winning alliance proposed competitive terms and conditions, following a series of discussions addressing the technical details of the project; with one of the main goals being providing financing to projects of a developmental inclination.
 
Fayed added that the financing comes in light of the direction adopted by Banque du Caire and the arranging banks, which involves contributing to economic development, driven by the role played by the said Banks in supporting and endorsing added-value projects, amidst the changes witnessed by the investment landscape in Egypt.
 
On his part, Mr. Akef El-Maghraby – Vice Chairman of Banque Misr – commended the constructive collaboration between the participating Banks, which resulted in successfully completing the financing. He indicated that Banque Misr’s participation in arranging this loan asserts its leading role in proactively contributing to the country’s economic and industrial development and supporting all aspects of the Egyptian economy. This is especially since the wood manufacturing industry is considered among the most impactful, due to its interdependency with a large number of industries and activities that the Bank keenly finances in order to create more job opportunities in various fields. As such, Banque Misr consistently partakes in initiatives and protocols that seek to achieve sustainable development.
 
Mr. Yehia Aboul Fotouh – Deputy Chairman of the Board of NBE – iterated that the Bank’s participation in financing this project comes within the framework and direction of supporting and financing industrial projects that positively impact the environment, in order to achieve comprehensive development. He commended the professionalism exhibited by the teams representing the participating Banks, especially in light of the exceptional circumstances experienced in Egypt and around the world; asserting that the financing offered by banks operating in the country to the industrial sector reflect the trust of local financial institutions in the feasibility of these projects.
 
Worth noting is that WOTECH’s project is considered the first of its kind in the Middle East for producing MDF wood using German technologies, which targets production through the use of rice straw. This waste material is customarily disposed of by farmers via combustion, which is considered one of the most persistent causes of pollution. In this regard, in addition to being an economic and developmental project, the project also carries a positive environmental value, since it will effectively contribute to eradicating a chronic environmental issue in Egypt, while manufacturing a product with added value that the state seeks to roll-out through similar projects.
 
The financing to be granted to the first factory manufacturing this type of wood using rice straw is a culmination of financial expertise commanded by the participating Banks, coupled with the technical experience possessed by the Petrochemicals Holding Company and the discussions held between the two parties. This was for the purpose of reaching a deal on financing a flagship project that is set to be the pride of national Egyptian industries and to resonate favorably across the Middle East.