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Fri 15 Aug 2014 02:39 PM

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Egyptian banks to issue 5-year investment vehicles for Suez Canal -PM

Egypt plans to build $8.4bn canal alongside existing, 145yo waterway

Egyptian banks to issue 5-year investment vehicles for Suez Canal -PM

Egypt's prime minister said on Thursday its banks would issue five-year "Suez Canal investment certificates" with a 12 percent interest rate and quarterly dividends.

Ibrahim Mehleb said the new Suez Canal project, announced earlier this month, would cost about 60 billion Egyptian pounds ($8.4 billion) and be funded by debt certificates to be issued "in about a week", according to the state-run al-Ahram news portal.

Egypt plans to build a new canal alongside the existing, 145-year-old waterway to expand trade along what is the fastest shipping route between Europe and Asia.

The project includes the development of 76,000 sq km (29,000 sq miles) around the canal into an international industrial and logistics hub to attract more ships and generate income.

Officials have said the new canal would boost annual revenues to $13.5 billion by 2023 from $5 billion currently, a vital source of hard currency for a country that has suffered a slump in tourism and foreign investment since the 2011 uprising.

Mehleb's announcement followed a meeting with President Abdel Fattah al-Sisi, the central bank governor, and ministers holding portfolios related to international trade.

"The president adopted today a national plan to finance the Suez Canal project," Mehleb said on state television. "Every Egyptian can own them and they will be issued by Egyptian banks."

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