The National Bank of Egypt (NBE) will meet the Egyptian General Petroleum Corporation (EGPC) next week to solve its financial crisis which impeded it from meeting the petroleum requirements of the market which resulted in a shortage of diesel.
Sources said NBE offered US$ 3.1 billion in letters of credit and guarantee for the EGPC in FY 2011/2012 to finance the importing of petroleum products.
The EGPC renewed the credit facilities with NBE for this year. The first part of the credit facilities is US$ 1.2 billion which is allocated for covering the agreement liabilities signed between the EGPC and the Kuwaiti Ministry of Oil which allows the EGPC import crude oil from Kuwait to meet the shortage of diesel and gas. Kuwait offers the EGPC a grace period of nine months to repay its debts.
The second part of the credit facilities is US$ 1.9 billion which will enable the EGPC import petroleum products from any other country. EGPC renewed its credit facilities amounting to EGP 22 billion in FY 2012/2013.
Sources said the credit facilities are offered on an annual basis for EGPC to finance the purchasing and importing of the EGPC’s petroleum and materials requirements. The EGPC are committed to the repayment of its liabilities as it has strong cash flow.
NBE is the largest financier of EGPC as the lender offered about 30% of the total value of finances offered to it. The bank’s portfolio of petroleum finances reached EGP 50 billion.
The Central Bank of Egypt (CBE) refused the EGPC’s request concerning raising the maximum financing limit for each customer in order to receive more finances from banks.
