In a meeting chaired by Prime Minister Dr. Mustafa Madbouly, the Cabinet approved several decisions aimed at fostering economic growth and development. The key highlights of the decisions include:

1.         The Cabinet reviewed the proposed incentive package to encourage the tourism sector to accelerate investment in hotel room construction as part of the initiative to support productive sectors.

During the meeting, emphasis was placed on the fact that the return on investment in establishing new hotel rooms would support the national economy. For every 15,000 hotel rooms, it is estimated to contribute to a value-added tax of approximately 1 to 2 billion Egyptian pounds and about 2 billion pounds in commercial and industrial profit taxes. Additionally, it is expected to generate around 45,000 new job opportunities, both directly and indirectly, with the commencement of room operations.

The meeting also highlighted that the incentives offered in this regard would contribute to increasing the state's foreign currency reserves and reduce unemployment rates. This is a direct result of stimulating the private sector to develop its investments.

The key features of the new initiative to support the tourism sector were discussed during the meeting. The agreement was reached between the Ministries of Finance and Tourism and Antiquities, the Investment Authority, and it was noted that the credit amount available to each company would be determined based on its business volume and regulated banking rules. The maximum limit allowed for each company is 1 billion pounds or 2 billion pounds for affiliated clients, provided that each company's transactions with a maximum of two banks participating in the initiative.

The funds allocated for the new tourism initiative, with a maximum of 50 billion pounds, will be directed toward building or establishing and operating new rooms or acquiring closed rooms. The Ministry of Tourism and Antiquities must confirm that the rooms were closed for at least 12 months before the withdrawal date. The rooms should be located in areas including Greater Cairo, Luxor, Aswan, the Red Sea, South Sinai, and the North Coast.

The withdrawal from the allocated amounts for the initiative will start on January 1, 2024, and continue until December 31 of the same year. To continue benefiting from the initiative, clients must commit to repayment according to loan conditions with the bank. Clients are prohibited from using any available credit under this initiative to settle any other debts due on them on the date of initiating this initiative or during its implementation in the banking sector.

The executive mechanisms for the initiative will be developed in coordination between the Ministry of Finance, the Central Bank of Egypt, the Ministry of Tourism and Antiquities, and other relevant parties.

The second part of the initiative mentions that investment projects established after the implementation of Investment Law No. 72 of 2007, according to the investment map, will be granted an investment incentive deduction from the net profits subject to tax. This includes tourism projects determined by a decision of the Supreme Council for Investment.

Several conditions for qualifying for these incentives were reviewed to ensure the governance of procedures. Among them is the establishment of a mechanism for companies to commit to selling 40% of the revenues earned in foreign currency through the banking sector, obtaining them at the official exchange rate. This applies throughout the support period, which is five years. The initiative's beneficiary is expected to receive support after submitting the operating license, and there is a proposal to extend the operating license submission deadline to June 30, 2026, to allow an opportunity to increase hotel capacity.

2.         Approval of the draft resolution by the Prime Minister regarding the procedures for dealing with industrial lands and their pricing, in light of the expiration of the prices stipulated in the Prime Minister's Decision No. 3308 for the year 2022 as of September 22, 2023.

The new resolution includes the determination of prices for dealing with industrial lands, either through ownership or the right of usufruct, to be effective from September 23, 2023, the day following the expiration of the prices specified in the previous decision.

The draft resolution stipulates that the committee formed by the Prime Minister's Decision No. 2067 for the year 2022 will be responsible for collecting, studying, and taking the necessary actions for the immediate allocation of industrial lands to investors. This is after they fulfill the required documents. The disposal of industrial lands can be either through ownership or the right of usufruct, according to several guidelines.

Regarding the ownership system, the prices for industrial lands are detailed in the resolution, determined based on the square meter's share of the infrastructure cost. These prices will apply to contracts concluded starting from September 23, 2023. The payment for the land will be according to one of two methods. The first is a down payment of 25% of the total land value, with the remainder in three equal annual installments, plus accrued interest at a rate of 10% per year. The commitment includes completing the project and obtaining the operating license within three years from the date of land receipt, following the program schedule. The second method involves a 10% down payment of the total land value, with a grace period of two years from the contract payment date. The remaining amount is to be paid in equal quarterly installments over four consecutive years, along with a 10% annual interest rate. In case of delayed payments, provisions for dealing with arrears, including contract termination in case of non-payment of two consecutive installments, are specified.

For those allocated industrial lands who have paid 25% of the total land value, they can apply to the relevant authority with the request to adopt the second simplified payment method, with a deduction of the additional 15% from the subsequent installments. The timeline will be adjusted accordingly, making it two years from the date of the contract payment.

As for the usufruct system, the annual fee is determined as 5% of the ownership square meter price, fixed for the first four years and subject to a cumulative annual increase of 7% for the fifth and sixth years, rising to 10% annually for the remaining usufruct period. The usufruct period is determined by the governorate with a maximum of fifty years, renewable under agreed-upon conditions. The investor must demonstrate ongoing activity by obtaining an operating license and an industrial registry. In case of delayed payment of the usufruct fee, interest will be added according to the central bank's declared rate, and cancellation rules will be applied by the relevant authority. If the investor fails to pay two consecutive installments, the governorate has the right to terminate the contract. At the end of the usufruct period, the land and its facilities revert to the governorate if the allocated party does not complete the project and obtain the operating license within the specified grace period, which is two years from the contract payment date.

The draft resolution also allows those with usufruct rights to transition to the ownership system during the usufruct period. Conditions include a minimum of five years since project establishment, obtaining an operating license, an industrial registry, and commencement of operations. Additionally, the land's price will be re-evaluated at the full market price, with a deduction for the usufruct fee paid.

3.         The Cabinet approved the draft resolution of the President of the Republic regarding the Consultative Cooperation Agreement to support the selection of investment plans for the "Sustainable Green Industry" project, with a value of 500,000 euros, as a grant from the European Investment Bank. This grant aims to provide technical assistance to finance the consulting services required to select investment plans for the "Sustainable Green Industry" project. The project offers concessional loans and grants to companies in both the public and private sectors to implement green investments in various key areas. These include reducing carbon emissions in the industrial sector through the use of renewable energy, green hydrogen, and biogas, addressing industrial pollution of air, water, soil, and workplaces, and enhancing sustainable industrial practices by improving energy efficiency and resource utilization. The project assists the implementing entity, the Environmental Affairs Agency, in digitizing its key environmental procedures, such as environmental permits and impact assessments, contributing significantly to efficiency and transparency.

4.         The Cabinet approved the draft resolution of the President of the Republic regarding the agreement to "Amend the Agreements with the Islamic Development Bank on Abandoning LIBOR as the Reference Interest Rate and Replacing it with SOFR," in line with similar measures taken by international and regional financial institutions such as the World Bank, the European Bank for Reconstruction and Development, and the Asian Infrastructure Investment Bank. The modified agreements include five lease-to-own agreements for various projects, including the South Helwan Power Station, the Assiut Power Station (Walideya), the electrical connection project between Egypt and Saudi Arabia, the development of the Assiut Refinery Project, the West Cairo Power Station, and the West Damietta Power Station. Additionally, there is a restricted Mudaraba agreement for the Small and Micro Enterprise Development Program and an agency agreement for the Education and Vocational Training System Development Program for Employment.

5.         The Cabinet approved the draft resolution of the President of the Republic regarding the Financial Cooperation Agreement between the Government of the Arab Republic of Egypt and the Government of the Federal Republic of Germany to finance projects. These projects include the National Solid Waste Management Program, financial support for the Comprehensive Technical Education Initiative, and risk management mechanisms. The projects aim to support the establishment of 25 Egyptian Centers of Excellence, including sector-specific centers and schools for applied technology. This collaboration involves the Ministry of Education and Technical Education, as well as cooperation with the Ministry of Environment in restructuring the national waste sector and implementing an integrated system for solid waste management in the targeted governorates of Kafr El-Sheikh, Gharbia, Qena, and Assiut. Additionally, it supports the financial needs of small and medium-sized enterprises in collaboration with the Central Bank of Egypt.

6.         The Cabinet approved the draft resolution of the President of the Republic to allocate certain state-owned areas to the General Authority for Land and Dry Ports for use in establishing dry ports and logistics zones in the governorates of Aswan and Alexandria. The goal is to maximize transit trade and re-export, aligning with the state's plan to make Egypt a global hub for trade and logistics, in accordance with the directives of the President.

The designated areas in the resolution include approximately 399.36 acres near Abu Simbel in Aswan, approximately 17.78 acres near Borg El Arab in Alexandria, and approximately 115.68 acres near Borg El Arab in Alexandria.

7.         The Cabinet adopted the minutes of meeting No. 65 held on 10/12/2023 for the High Compensation Committee, formed by the Prime Minister's Decision No. 1677 of 2017. The minutes include compensation rate tables for contracts related to contracting, supplies, and services for various projects and works.

8.         The Cabinet approved the Governorate of Damietta's contract with the "Electricity Sector of Damietta," a subsidiary of the North Delta Electricity Distribution Company, to implement the process of connecting electricity to four new entry circuits in the urban extension of Ras El Bar city. This contributes to expediting the introduction of the electricity facility to this area as part of the governorate's efforts to enhance the provided services.

9.         The Cabinet approved the result of the Ministry of Health and Population's study, represented by the Higher Assessment Committee at the General Authority for Governmental Services, regarding the request of South Sinai Governorate to use the usufruct system for 50 years in an area of 1041.25 m2, in addition to the originally allocated area for one of the tourism development companies, as part of the completion of the company's existing project in the Naama Bay area of Sharm El Sheikh.

10.       The Cabinet approved the Ministry of Health's request to contract with the West Delta Electricity Sector, a subsidiary of the South Delta Electricity Distribution Company, to implement external electrical feed works for the New Tanta Cancer Center project. This supports efforts to enhance the health sector and continuous endeavors to improve the level of services provided to citizens.

11.       The Cabinet approved requests submitted by some entities to contract in accordance with the provisions of Article 78 of the Law Regulating Contracts Entered into by Public Entities, issued by Law No. 182 of 2018. These requests included the contracting by Minya University to complete the implementation of the new building project for the Faculty of Dar Al-Uloom, as well as the completion of the construction, finishing, and equipping of the annex building for the college. Additionally, Cairo University is contracted to execute the third phase of the surveillance camera system at the university's colleges and institutes. Furthermore, Al-Azhar University is contracted to purchase diesel generators necessary for the Bab El Shaaria University Hospital.

The requests also involved the General Authority for Healthcare contracting to establish central warehouses for the authority's branches in Aswan and Suez. Moreover, a central warehouse is to be established to provide the needs of units, centers, and hospitals in the cities of Al-Tur and Ras Sedr in South Sinai. This includes the establishment of a branch office for the authority in the Suez Governorate. Additionally, there is a contract for the implementation of the infrastructure development project and private connection networks for Sharm El Sheikh International Hospital.

12.       The Cabinet approved the deferral of the application of the 15% increase set on the utilization fees collected from companies operating in free zones for one year, effective from 1/1/2024. This approval is part of the state's efforts to deal with the repercussions of the current economic crises, aiming to alleviate the burdens on investment projects in free zones. This measure contributes to preserving these projects and increasing their export volume.

In conclusion, the decisions and approvals made by the Cabinet reflect a strategic and forward-looking approach to various sectors in the country.

The agreements related to sustainable green projects, financial cooperation, modifications in financial agreements, and the allocation of state-owned lands for logistics and port facilities all underscore the government's commitment to fostering economic growth, environmental sustainability, and infrastructure development.

Additionally, the deferment of certain fees for free zone companies demonstrates a pragmatic response to economic challenges, aiming to support and sustain these investments. The diverse range of decisions showcases the government's dedication to comprehensive development across multiple domains, reinforcing its role in steering the nation towards prosperity and resilience.