The Egyptian Ministry of Electricity and Renewable Energy plans to develop a strategy that will minimize the risks of taking out loans to invest in the sector. This development is aimed at increasing investments in energy efficiency. The ministry is currently negotiating with local banks, which have expressed an interested in supporting this initiative, and will chose the most suitable contender, Al Borsa News reported.

This strategy is built upon the development of an EGP 50 million fund. This sum will be repaid upon establishing the Energy Efficiency Fund, in cooperation with the Egyptian Electricity Holding Company (EEHC). The Credit Guarantee Company will also boost the strategy’s capital.

The capital’s development includes the leverage value, which is assessed by the institutions’ dependency on loans to cover its financial need. The leverage value will have a 50% contribution from the Credit Guarantee Company and another 50% from the General Directorate of Energy Efficiency and Climate Change. The leverage value is set to increase by 10% every two years and reach a 10% contribution from the General Directorate and 70% from the Credit Guarantee Company. The maximum guaranteed amount granted for such lending will not exceed EGP 10 million. If the borrowing parties encounter any difficulties in paying back these loans, then the EEHC the Credit Guarantee Company will each pay back 50% of said loans.