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Banks Require Project Consultants for Loans
Banks in Egypt are moving towards tightening financing conditions for construction and real estate development companies, now relying on funding specific projects only after a thorough assessment of their financial and technical feasibility. They also require the appointment of an independent engineering consultancy to oversee execution and approve payment certificates before disbursing funds. Additionally, the financing bodies have stopped issuing advance payment certificates for projects that exceed their scheduled deadlines, leading to increased caution among banks in renewing financings and impacting liquidity, especially as payment receipts decline and some companies face delays. In contrast, banks are demanding complete documentation of contracts and implementation schedules and have adopted a project financing disbursement system based on the approval of achievement percentages verified by the consultant. This approach aims to reduce default risks and ensure that funds are used strictly for their designated project purposes.
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