Chinese banks have agreed to provide 85% of the $3bn needed to fund the first stage of a new capital for Egypt, according to a senior executive with the China State Construction Engineering Corporation (CSCEC), the contractor that is to build it.
Zhao Qiang, CSCEC Egypt’s deputy general manager, said in an interview with the Bloomberg news agency that the banks would provide the capital. He added that his company was negotiating with local contractors, although he declined to name names.
Khaled Abbas, the assistant housing minister, said the Chinese would provide a 10-year loan with an interest rate of between 2% and 3% and a grace period of between 36 and 42 months. The remaining 15% will be met by his ministry.
Plans to build a new capital to the east of the present one were announced in March 2015 at an international investment conference on the Red Sea resort of Sharm El Shiekh. At that time the project was billed as an $80bn scheme developed over 12 years that would house not only the Egyptian government but 7 million of its people.
At first the suggestion was that the main investors would come from the UAE, and that the scheme would be overseen by UAE developer Capital City Partners. However, subsequent negotiations did not go well, and in September 2015, it was announced that another agreement has been signed with CSCEC to study the building and financing of the capital’s relocation, which now had a price tag of $45bn.
By February 2017, the size of the scheme was given as $3bn, and CSCEC was reportedly out of the picture. Instead, the scheme would be "built by Egyptian hands", according to the housing ministry.
This announcement was partially reversed in October, when CSCEC signed a deal in the presence of President Abdel-Fattah al-Sisi to construct a 345m-high skyscraper, 12 business complexes, five residential buildings and two hotels over half a square kilometre.
Image: Skidmore, Owings & Merrill’s rendering of the new capital