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Egyptian private developer Inertia has signed a long-term Islamic financing agreement worth 5.2 billion Egyptian pounds (109.5 million) with a consortium of Egyptian banks to partially fund its Jefaira project, an integrated urban development located in Ras El Hekma on Egypt’s North Coast.

The financing agreement, based on the Mudaraba structure, has a maximum term of six years.

Jefaira, one of the largest real estate developments in the Ras El Hekma area, covers approximately 2.7 million square metres and comprises 10 residential phases.

The banking consortium included:

  • Banque Misr acting as original lead arranger, financing marketer, financing agent, collateral agent, and account bank;
  • Banque du Caire as original lead arranger, financing marketer, and account bank;
  • National Bank of Egypt as original lead arranger and financing marketer;
  • Housing and Development Bank as lead arranger and technical bank;
  • Suez Canal Bank as lead arranger and consumer account (escrow) bank.

Matouk Bassiouny & Hanawy served as the legal advisor for the transaction with Engineering Consulting Group (ECG) as the independent engineering consultant and Baker Tilly (Wahid Abdel Ghaffar & Partners) as the financial advisor.

Mudaraba is an Islamic finance technique in which a lender or investor (rab al maal) and a borrower or investment manager (mudareb) establish a partnership to undertake a business or investment activity. Profits accrued are shared between the two parties on a pre-agreed basis, whilst any loss is borne by the provider(s) of the capital.

(1 US Dollar = 47.48 Egyptian Pounds)

(Writing by Eman Hamed; Editing by Anoop Menon)

(anoop.menon@lseg.com)

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