Sponsors in Egypt

Egyptian law does not limit a “sponsor” to a particular type of institution. In practice, sponsors are typically investors, funds or developers that participate in a project. Participation usually takes the form of:

• direct involvement in establishing and running the special purpose vehicle (SPV) that carries out the project; or
• providing equity through shareholdings or other equity contributions.

Depending on the nature and structure of the project, sponsors may include:

• Egyptian or foreign companies;
• strategic investors whose business activities and technical expertise are relevant to the project;
• investment funds; or
• state-owned entities and sovereign funds.

Lenders in Egypt

The main institutions that act as lenders include:

• Egyptian banks licensed by the Central Bank of Egypt (CBE);
• branches of foreign banks licensed by the CBE;
• certain non-banking financial institutions regulated by the Financial Regulatory Authority (FRA); or
• foreign banks and international financial institutions.

PPP transactions are primarily governed by Law No 67 of 2010 regulating partnership with the private sector in infrastructure projects, services and public utilities and its executive regulations (the “PPP Law”) and Law No 182 of 2018 regulating contracts concluded by public authorities. The PPP Law enables administrative authorities to enter into PPP agreements with private-sector partners, which may be an Egyptian or foreign legal person in which the Egyptian public-sector capital contribution to the company or consortium is less than 20%.

The winning bidder shall establish an Egyptian joint stock company to act as the private-sector SPV, with the sole purpose of implementing the PPP agreements. The SPV shall undertake to either:

• finance, construct and equip infrastructure projects and public utilities and make their services available; or
• finance and develop such utilities while retaining the responsibility of maintaining what is constructed or developed, as well as providing the necessary facilities and services to ensure that the project is fit for use in production or for the regular and continuous provision of services throughout the term of the PPP agreements.

The total value of PPP agreements must not be less than EGP100 million and their term must not be less than five years and must not exceed 30 years from the date of completion of the construction and equipping works or, as applicable, the development works. Notwithstanding the foregoing, the term of a PPP agreement may exceed 30 years where required by a material public interest, subject to the approval of the Cabinet of Ministers upon the recommendation of the Supreme Committee for PPP Affairs referred to in the PPP Law.

Furthermore, the SPV is prohibited from selling any funds or assets relating to the project or to any facilities constructed or developed that it may own pursuant to the PPP agreements, except for the purposes stipulated in the PPP agreement and upon obtaining the approval of the competent authority. However, a security interest may be created over such assets, subject to the prior written approval of the administrative authority for project financing purposes.

It is worth highlighting that the articles of association of the SPV shall restrict:

• the transfer of the SPV’s shares prior to the date of completion of the construction and equipping works or development works, as the case may be; and
• the transfer of the shares held by the majority shareholders after such date, unless a written approval is obtained from the competent authority of the administrative authority.

In all cases, the shares of the SPV must not be pledged for any purpose other than project financing or the refinancing of the PPP project.

Generally, there are no issues or Egyptian law restrictions when it comes to structuring a project finance deal. However, the requirements and restrictions related to enforcement over security interest as discussed in 2.1 Assets Available as Collateral to Lenders, 2.5 Restrictions on the Grant of Security or Guarantees, 3.4 A Foreign Lender’s Ability to Enforce and 4.2 Restrictions on the Granting of Security or Guarantees to Foreign Lenders should be considered when structuring a project finance deal.

Egyptian project financings usually take the form of build-own-operate (BOO), build-operate-transfer (BOT), build-own-operate-transfer (BOOT) or direct government contracting, among other key structures used for financing projects that vary based on the nature of the industry – particularly for the use of infrastructure and strategic public sector projects.

Projects may be financed through various funding structures through a combination of equity and debt financing. Equity financing typically comprises contributions from sponsors or shareholders, whether through capital contributions or through subscriptions for shares in the project company. Debt financing may take the form of bilateral or syndicated loans provided by Egyptian commercial banks licensed by the CBE, foreign banks and international financial institutions.

Depending on the nature of the project (including its location and sector as well as the identity of the contracting authority), various legal requirements, limitations, restrictions and applicable governmental approvals may need to be considered.

Egypt has been active across multiple sectors and industries. In August 2026, the Prime Minister of Egypt affirmed the governmental commitment for the expansion of renewable energy activities in projects such as Nefer Minya, which will produce 1,000 MW of solar power, and 600 MW of electricity storage capacity in West Minya. The Suez Canal Zone (“SCZONE”) has been advancing steadily since 2025 in green hydrogen and ammonia production projects.

Substantial infrastructure development is also expected across a range of sectors, including in water desalination and in transport. In May 2026, SCZONE launched a tender for the development, construction and operation of a major water desalination plant. Additionally, the Egyptian aviation sector is witnessing major transformation as it aims to upgrade its airports infrastructure and improve its operational efficiency.

Furthermore, Egypt is seeking to establish itself as a regional technology hub in AI data centres and digital infrastructure. The Egyptian Ministry of Communications and Information Technology, the Ministry of Industry, and the Information and Decision Support Center (IDSC) at the Cabinet held a three-day summit in September 2026 to discuss investment, industrial and economic opportunities, particularly in the expansion of data centre infrastructure, AI applications, next-generation telecommunications, cloud computing, technology manufacturing, and cybersecurity.

Common forms of security include mortgages over real estate, security interests over movable assets, pledges over shares, assignment of receivables and contractual rights, corporate and personal guarantees, security over bank accounts, security over insurance proceeds, and mortgages over a fonds de commerce. The applicable creation and perfection requirements vary depending on the relevant collateral.

Immovable Assets

Lands and buildings are typically secured by a real estate mortgage. The mortgage must be created by an official instrument registered with the competent notary public or in rem registrar in order to be effective against third parties and to establish priority among different classes of creditors, which is determined by the date of registration.

Movable Assets

Movable assets may be secured by virtue of Law No 115 of 2015 and its executive regulations (together, the “Movables Collateral Law”), which established the Egyptian Collateral Registry (ECR), supervised by the FRA. This regime covers a broad range of movable assets, including receivables, future movable assets, bank accounts, inventory and equipment, as well as certain IP rights and other rights, and permits non-possessory security – meaning that the debtor may retain possession of the asset while the creditor’s interest is recorded and protected through registration.

Registration with the ECR generally makes the security effective against third parties and determines priority by reference to the date and time of registration, subject to statutory exceptions. Certain assets remain subject to specific security and perfection regimes.

Other Security

Pledges over shares, assignments of receivables and contractual rights, and assignments of insurance proceeds are also commonly used. Their perfection requirements depend on the relevant asset and may include registration, notification to or acknowledgement by the relevant obligor, or other statutory and contractual formalities.

Security Agent

Security agents are commonly used in syndicated and cross-border financings. Although Egyptian law does not recognise the common-law concept of a “security trustee” in the same manner as common-law jurisdictions, security agent structures are recognised and commonly used in practice.

The security agent generally acts pursuant to an agency arrangement with the lenders and may enter into and administer the relevant security documents on behalf of the secured lenders. For security subject to the Movables Collateral Law, foreign lenders that do not satisfy the applicable Egyptian licensing requirements will generally appoint a CBE-licensed bank as security agent.

The precise manner in which security may be held and registered through a security agent should be assessed separately for each type of collateral and by reference to the applicable Egyptian perfection security requirements.

Until 2015, Egyptian law did not recognise the concept of a floating charge. Following the issuance of the Movables Collateral Law, it is now possible to create floating charges over certain categories of existing and future movable assets and – subject to the applicable requirements – over future obligations. This does not, however, amount to a floating charge over a company’s entire present and future asset base.

Accordingly, a lender may – depending on the circumstances and the nature of the assets – obtain security over a defined class or pool of movable assets, including future assets. The relevant security would generally need to be appropriately documented and perfected in accordance with the applicable legal regime.

In practice, therefore, financing structures may combine different forms of security over different categories of assets, rather than relying on a single universal security interest. The appropriate structure and perfection requirements are highly dependent on the nature of the assets and the underlying financing.

The costs associated with registering security interests vary depending on the type of security and the applicable registration regime. In the case of real estate mortgages securing loans exceeding EGP30 million, banks are subject to a statutory cap of EGP100,000 on the notary public registration fees. For security interests over movable assets, registration through the ECR is subject to a registration fee capped at EGP500.

Under Egyptian law, security interests are generally required to relate to assets that are sufficiently identified or identifiable under the applicable security regime. The level of identification required depends on the type of collateral – for example, a real estate mortgage, pledge over shares and a pledge over bank account would necessarily require identifying the relevant asset, as the case may be.

For movable assets falling within the Movables Collateral Law, it is possible in certain circumstances to describe the collateral by reference to a category or class of assets (including future assets), rather than identifying each individual asset. The description must nevertheless be sufficiently clear to determine the assets covered by the security interest.

Accordingly, a general description may be sufficient in certain cases, but the appropriate level of identification should be assessed by reference to the nature of the asset and the requirements of the applicable perfection regime.

Certain categories of rights and assets cannot generally be subject to security under the Movables Collateral Law, including future movable assets deriving from inheritance, wills, pensions, life insurance policies, compensation entitlements, alimony, wages, or salaries. The availability of security over a particular asset should therefore be assessed by reference to the nature of the asset and the applicable statutory regime.

Further, in respect of upstream guarantees, certain corporate benefits and conflict-of-interest considerations may restrict the ability of an Egyptian company to provide guarantees for the obligations of its parent or other group companies. Restrictions may apply, for example, where the beneficiary of the guarantee is represented on the guarantor’s board. The permissibility of an upstream or cross-stream guarantee should therefore be considered in light of the company’s corporate structure, constitutional documents, and the applicable Egyptian corporate law requirements.

There is no single central registry in Egypt through which all types of security interests can be searched. The availability and scope of searches depend on the nature of the collateral and the applicable security regime.

Certain forms of security are searchable, including pledges over shares deposited with the Minister for Central Clearing, Depository and Registry (MCDR), real estate mortgages recorded with the notary public, mortgages over a fonds de commerce, and security interests over movable assets registered with the ECR. Accordingly, lenders typically conduct the relevant asset-specific searches and obtain appropriate certificates or confirmations as part of their legal due diligence. The scope of such searches will depend on the nature of the collateral and may need to be supplemented by contractual confirmations, representations and warranties from the borrower or the relevant security provider.

Other categories of security interest may not be capable of being identified through a centralised public search. In such cases, lenders generally rely on other forms of due diligence and contractual protections to assess the existence of competing security interests.

The absence of a single comprehensive search mechanism is therefore an important practical consideration when taking security in Egypt, particularly where the collateral comprises different types of assets.

The mechanics governing the release of security differ according to the nature of the security interest concerned.

Where the security interest has been registered, the relevant security interest will generally need to be released or discharged through a process before the same relevant security registrar. This will typically require confirmation or release instructions from the secured creditor or – as the case may be – the security agent, together with the relevant filing or registration with the competent authority.

In the absence of such confirmation and release instructions, the registered security interest may remain recorded notwithstanding repayment of the underlying obligations. Accordingly, the relevant parties should ensure that release formalities are completed promptly following settlement of the secured debt to avoid any continued encumbrance being reflected on the relevant register.

A secured creditor may generally commence enforcement following a default giving rise to enforcement rights under the relevant finance and security documents, subject to any applicable contractual cure periods, statutory notices, and other mandatory requirements.

Immovable Assets

Immovable assets are generally enforced through the judicial execution process. An execution order is issued by the competent court upon the creditor’s request and is annotated with the competent notary public. The debtor is then notified and granted the applicable statutory period to satisfy the outstanding debt. If the debt remains unpaid, the mortgaged property may ultimately be sold by public auction under the supervision of the competent enforcement judge.

Movable Assets

Movable assets are subject to the enforcement procedures applicable to the relevant type of security. Under the Movables Collateral Law, the secured creditor may – following the requisite notification to the debtor and expiry of the applicable statutory period – seek the sale of the secured movable asset, in whole or in part, through the competent court. The specific enforcement mechanism will depend on the nature of the movable asset and the security created over it.

Certain forms of security benefit from specific or more streamlined enforcement mechanisms. By way of example, the Central Bank and Banking System Law No 194 of 2020 (the “CBE Law”) provides specific rules for enforcement of share pledges registered in favour of Egyptian banks – under which, the pledgee may enforce its rights over the pledged shares in accordance with the applicable Egyptian Exchange sale-and-purchase procedures following the required notice to the debtor. Similarly, the Movables Collateral Law provides a framework for enforcement of security over bank accounts – under which, enforcement may, subject to the applicable requirements, be effected through mechanisms such as:

• set-off between the pledged accounts; or
• the application of the secured funds against the amounts due.

The ability to enforce may also be affected by restrictions applicable to foreign lenders and other foreign entities, as discussed in 3.4 A Foreign Lender’s Ability to Enforce and 4.2 Restrictions on the Granting of Security or Guarantees to Foreign Lenders, including restrictions arising from the nature of the secured asset, applicable licensing requirements and the relevant security registration regime.

A security agent may enforce security on behalf of a syndicate of lenders, provided that the relevant security documents and the perfection or registration arrangements validly recognise the security agent’s capacity to hold and enforce the security on behalf of the secured lenders. The ability of the security agent to take enforcement action directly will therefore depend on the nature of the security, the applicable statutory regime, and the capacity in which the security agent holds or administers it.

In general, the choice of a foreign law as the governing law of a contract will be deemed a valid choice of law to the extent it does not contradict specific Egyptian law requirements or public order.

Egyptian courts will generally assume jurisdiction over disputes unless the relevant party invokes, at the outset of the proceedings, the contractual term referring disputes to a different forum. Further details concerning enforceability of foreign judgments are included in 3.3 Judgments of Foreign Courts.

Recognition of Foreign Court Judgments

A foreign court judgment may be enforced in Egypt only after an exequatur has been obtained from the Egyptian courts. In granting the exequatur, the Egyptian court may examine the merits of the foreign judgment and the underlying proceedings to determine whether the requirements for recognition and enforcement under Egyptian law have been satisfied.

Enforcement will generally be subject to requirements such as:

• reciprocity between Egypt and the jurisdiction in which the judgment was rendered;
• the foreign court having had jurisdiction, while the matter does not fall within the exclusive jurisdiction of the Egyptian courts;
• the judgment having become final and enforceable in the jurisdiction in which it was rendered; and
• the judgment not conflicting with an existing Egyptian judgment and not violating Egyptian public policy.

Recognition of Foreign Arbitral Awards

Egypt is a signatory to the 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”). In addition, Egyptian Arbitration Law No 27 of 1994 provides the domestic framework for the recognition and enforcement of foreign arbitral awards.

The Egyptian courts will examine an award against the applicable statutory and New York Convention requirements before permitting enforcement – although the grounds for refusing enforcement of an arbitral award are narrower than those applicable to a foreign court judgment.

From a practical perspective, the ability of a foreign entity to enforce its rights under a loan or security agreement over movable assets may be limited, given that eligibility to register security with the ECR is subject to applicable Egyptian licensing requirements. Foreign lenders may therefore need to appoint an eligible Egyptian security agent where the relevant security cannot be registered directly in their favour.

Similarly, in respect of security over shares, enforcement proceedings pursued directly by a foreign entity may involve additional procedural considerations. The use of a local security agent may therefore facilitate the practical administration and enforcement of the security.

As regards security over a fonds de commerce, foreign entities remain subject to additional requirements, as set out in 4.2 Restrictions on the Granting of Security or Guarantees to Foreign Lenders.

More generally, foreign lenders should also consider any applicable foreign ownership, licensing, regulatory or exchange-control requirements – as well as the nature and location of the relevant collateral – when structuring their lending and security arrangements.

The CBE Law defines banking activities as any activity that primarily and regularly involves accepting deposits, obtaining financing, and investing such funds in providing financing and credit facilities or contributing to the capital of companies, as well as any activity customarily recognised in banking practice as a banking activity (“banking activities”). Furthermore, the CBE Law prohibits any natural or legal person who is not registered with the CBE from engaging in banking activities.

Notwithstanding the foergoing, current regulatory practice does not generally treat such offshore lending where it:

• is denominated in foreign currency;
• involves no lending in Egyptian pounds;
• is not publicly solicited or advertised in Egypt; and
• is targeted, non-recurring and not conducted as a banking business in Egypt.

Generally, the grant of the security or guarantees as a legal right to foreign lenders is unrestricted under Egyptian law. Nevertheless, practical difficulties that would face foreign lenders are, inter alia:

• registration requirements of the relevant security;
• undertaking enforcement measures against the borrower and third parties; and
• ongoing management and administration of the underlying security.

In this respect, such difficulties can be mitigated by appointing an onshore security agent as mentioned in 2.1 Assets Available as Collateral to Lenders.

With regard to the corporate guarantees, foreign lenders need to observe certain limitations, as set out in 2.5 Restrictions on the Grant of Security or Guarantees.

Foreign investment in Egypt is primarily governed by the Investment Law No 72 of 2017 (the “Investment Law”), which applies to domestic and foreign investments carried out within Egypt. It further provides a framework for investment through the inland investment, investment zones, free zones and technological zones regimes that offer numerous incentives and protections to encourage foreign investment in Egypt.

In this context, investment zones are specialised zones across various investment fields, including logistics, agricultural and industrial activities. The decision establishing the investment zone must specify its location, activities, and applicable conditions.

Free zones may take the form of:

• public free zones, accommodating licensed investment projects primarily engaged in activities aimed at exporting outside Egypt; or
• private free zones, limited to one or more projects carrying out similar activities where the nature of such activities so requires.

Technological zones, meanwhile, aim to promote activities in the information and communications technology sector, including the manufacture and development of electronics, data centres and software development.

For these purposes, an investor is defined under the Investment Law as any natural or legal person – Egyptian or non-Egyptian – who invests in Egypt in accordance with the provisions and requirements of the Investment Law for the purpose of carrying out investment activities in, among others, industrial, agricultural and technology sectors.

Under Egyptian law and the applicable investment framework, foreign investors are generally permitted to repatriate profits, dividends and invested capital through licensed banks in Egypt, subject to compliance with applicable regulatory and banking procedures and withholding tax. Such repatriation is effected in foreign currency and processed through the formal banking system in accordance with the rules of the CBE. In practice, the repatriation of profits and capital by foreign-owned companies operating in Egypt is a well-established and widely implemented market practice. Repatriation is typically subject to the availability of distributable profits and completion of customary corporate approvals.

From an operational perspective, repatriation transactions are facilitated through the Egyptian banking system and are influenced by the foreign investor’s relationship with its banking partners and the availability of foreign currency at the relevant bank at the time of the transaction.

Maintaining established banking relationships with reputable local and international banks is therefore an important practical factor in ensuring efficient execution of repatriation requests.

There are no specific restrictions under Egyptian laws on the project company’s ability to maintain offshore foreign currency accounts.

However, transfer of foreign currency funds from the offshore foreign currency accounts into Egypt is subject to the regulations and restrictions of the CBE – under which, such funds are categorised as:

• funds that are injected into Egypt for investment purposes; and
• funds that are injected in the Egyptian project company to undertake its operational purposes (which are subject to certain limitations under the CBE Law – for example, source of funds and intended use).

Irrespective of which category the funds belong to, the purpose of such foreign currency funds must be deemed as a valid purpose under the CBE regulations to date.

Under Egyptian law, financing and project agreements are generally not required to be registered or filed with a governmental authority as a condition to their validity or enforceability between the parties. However, depending on the nature of the agreement:

• perfection formalities may be required for certain rights to be enforceable against; and
• governmental or regulatory approvals maybe required for certain rights thereunder – for example, natural resource concessions and public utility concessions require a legislative decree by the Egyptian Parliament.

As described in 1.2 Public-Private Partnership Transactions, such approvals must be obtained from the competent administrative authority.

In project financing, a foreign entity a is granted a right of usufruct to develop, build, own (for the usufruct period) and/or operate a certain project – but not the land – by the relevant authority. Such lands are typically owned by the government and usually allocated to the relevant authority specifically for a strategic industry or sector.

Rules, licences and regulations concerning such projects vary and depend on:

• the nature of the industry;
• national strategic importance of the sector in question;
• the relevant contracting authority; and/or
• the strategic importance of the location.

By way of example, foreign ownership of agricultural land or lands of a similar nature is prohibited, while ownership of land and built properties in the Sinai Peninsula is strictly restricted to Egyptian individuals and wholly Egyptian-owned entities with a national security clearance and other qualifications determined by the relevant authority.

With regard to the ownership of natural resources by foreign entities, Article 32 of the Egyptian Constitution forbids disposal of the State’s public property. However, the right to exploit natural resources – or a concession in respect of  public utilities – may be granted by law for a period not exceeding 30 years. The specific licensing, exploitation and concession requirements are governed by several regulations, which vary according to the type of ”natural resource and the right, approval or licence granted. Such regulations include (but are not limited to) Law No 198 of 2014 as amended (the “Natural Resources Law”), Law No 61 of 1958 as amended, and concession contracts approved by Parliament.

The concept of agency is recognised under Egyptian civil law – namely, Law No 131 of 1948 (the “Civil Code”) – as an agreement pursuant to which the agent undertakes to perform a legal act on behalf of the principal. The agent must act within the limits of said agency agreement.

In practice, particularly in syndicated facility arrangements, two types of agents may be appointed by the lenders (depending on the nature and structure of the facility), which are:

• a facility agent; and
• a security agent.

The facility agent is generally responsible for co-ordinating the disbursements and repayments of the facility and managing communications and contractual matters between the borrower and the lenders. A security agent may be appointed to hold security interests on behalf of the lenders and to enforce such security interests in the event of default.

The above-mentioned agency structures are the most common structures recognised under Egyptian law and constitute the prevailing market practice in syndicated financing arrangements and are therefore commonly used as alternatives to a trust structure, as the concept of a trust is not generally recognised under Egyptian law.

As a general rule, the Civil Code sets out the claims that shall have a priority ranking over all debtor’s assets, whether movable or immovable.

Furthermore, the priority of competing security interests varies depending on the nature of the relevant security granted. With regard to movables collateral, pursuant to the Movables Collateral Law, the first ranking priority over security interest is determined by the date and time on which the relevant security interest in registered in the ECR – irrespective of the date on which such security interest was created. Accordingly, holders of such registered security interests shall have a priority over the secured movable that takes precedence over all statutory priorities and pledges established under other laws and without prejudice to the provisions of the Civil Code in this regard.

Furthermore, a creditor may assign a perfected security interest to another person, and such assignment will be effective against third parties as of the date on which it is registered in the ECR.

With regard to real estate mortgages, the priority of the mortgage will be determined from the date of its registration pursuant to the provisions of the Civil Code.

Accordingly, for both movables and immovables, the priority of competing security interests will be determined from the date of registering such security interest – subject to the relevant requirements and procedures depending on the nature and type of security created.

As regards the methods of subordination recognised under Egyptian law, it is worth noting that Egyptian law does not provide a specific statutory framework governing the contractual subordination of debt. Nevertheless, financing agreements may include contractual subordination arrangements pursuant to which the parties agree that the claims of one creditor shall rank behind those of another creditor. In addition, creditors are permitted to assign the priority ranking of their perfected security interests, subject to the rules set out under applicable laws.

Contractual provisions of debt subordination incorporated in agreements between the contracting parties generally would survive the insolvency of an Egyptian borrower.

A joint venture does not have to be incorporated under Egyptian law. However, for bankability reasons and as may be specifically required by the law in relation to certain types of projects, the market practice is for a project company to take the form of an Egyptian joint stock company. It is also common for a foreign company to be established in specific cases that require offshore company experience.

Company restructuring procedures are available in Egypt under the restructuring, preventive composition, and bankruptcy law, Law No 11 of 2018 (the “Bankruptcy Law”). The restructuring regime is intended to help traders and companies experiencing financial or administrative difficulties to restore their financial position and continue their business, rather than proceeding directly to liquidation or bankruptcy.

A company seeking restructuring must satisfy the eligibility requirements prescribed by the Bankruptcy Law – including certain requirements relating to its capital, operating history and financial status – and must not be subject to circumstances that preclude access to the restructuring regime, such as an existing bankruptcy or preventive composition proceeding.

The process involves the submission of a restructuring application and proposed plan, which is reviewed through the mechanism established under the Bankruptcy Law. The restructuring plan may address the company’s financial and operational position and may include measures relating to its assets, liabilities, financing, and capital structure.

Once the restructuring plan is approved in accordance with the Bankruptcy Law, the company generally remains in control of its business and assets, subject to the restrictions imposed by the approved restructuring arrangements and the applicable statutory framework.

The restructuring regime therefore provides a mechanism for a distressed company to continue operating while implementing an agreed plan with its creditors – although the availability and terms of the process depend on the company’s circumstances and the statutory requirements.

The commencement of insolvency proceedings does not extinguish a lender’s rights under its loan, guarantee or security documents. However, once a judgment declaring the debtor’s bankruptcy is issued, the exercise of creditors’ rights becomes subject to the procedures and restrictions under the Bankruptcy Law.

Notably, the Bankruptcy Law distinguishes between unsecured and secured creditors. Following a declaration of bankruptcy, individual actions and enforcement by unsecured creditors are generally restricted, while secured creditors may – subject to the applicable procedures – pursue enforcement against the assets securing their claims.

Further, once a judgment declaring the debtor’s bankruptcy has been issued, the statutory restrictions applicable to payments and individual enforcement take effect. Interest on unsecured debts ceases to accrue for the benefit of the general creditors, while interest on secured debts may be recovered only from the proceeds of the relevant secured assets, subject to the statutory payment waterfall.

The proceeds of the secured assets are applied in accordance with the statutory order, including first towards the principal debt and then towards accrued interest, subject to the applicable insolvency and priority rules.

The bankruptcy judgment is also notified to – and recorded with – the relevant registries and authorities, including the ECR and the relevant real estate publicity offices, as applicable.

Accordingly, although secured lenders retain important enforcement rights following a bankruptcy judgment, the timing and manner of enforcement are affected by the insolvency proceedings and should be considered alongside the applicable priority and distribution rules.

Statutory preferential claims, including judicial expenses and certain tax liabilities, rank in priority in accordance with the applicable provisions of the Civil Code and the Bankruptcy Law.

Once those legally mandated preferential claims have been satisfied, secured creditors are entitled to recover their outstanding claims from the proceeds of the assets securing their claims, subject to the applicable priority rules and enforcement costs. Any remaining proceeds are distributed among the unsecured creditors in accordance with the statutory distribution rules.

Where a secured creditor is unable to recover its claims in full of the secured asset, it may participate in the distribution of the remaining assets in respect of the unsecured portion of its claim, ranking alongside other unsecured creditors in accordance with the applicable rules of the Bankruptcy Law.

Accordingly, the existence and scope of security remain important determinants of a lender’s recovery in an insolvency – although the precise ranking will depend on the nature of the claim and the relevant collateral.

Under the Bankruptcy Law, and as discussed in 6.2 Impact of Insolvency Process, the main risks for lenders if the borrower, security provider or guarantor becomes insolvent are that enforcement of their claims and security may become subject to the applicable bankruptcy proceedings, which may delay or restrict the lender’s ability to enforce its rights and recover amounts due.

In practice, the principal risks include delays in enforcement, restrictions on individual recovery actions, and the potential involvement of the bankruptcy trustee in the realisation and distribution of secured assets. The effectiveness and priority of the lender’s security, as well as compliance with the applicable perfection and enforcement requirements, therefore become particularly important once insolvency proceedings commence.

Further, a fundamental risk inherent in any lending relationship is that the debtor’s assets may be insufficient to satisfy the claims of all its creditors in full. In such circumstances, secured creditors may participate in the distribution of the remaining proceeds on a pro rata basis with other creditors to the extent that their claim remains unsatisfied following enforcement of the relevant security, as set out in 6.3 Priority of Creditors.

A further important consideration for creditors is that certain categories of debtor fall outside the scope of the Bankruptcy Law and are instead subject to separate insolvency or restructuring regimes. Pursuant to Article 1 of the Issuance Articles of the Bankruptcy Law, joint ventures, public-sector entities and public business-sector entities are excluded from its application. In addition, banks registered with the CBE are subject to a special insolvency regime pursuant to Article 149 of the CBE Law, rather than the general provisions of the Bankruptcy Law.

Insurance policies in Egypt are primarily governed by the unified insurance law, Law No 155 of 2024 (the “Unified Insurance Law”). The Unified Insurance Law grants the FRA the exclusive authority to establish, license, supervise and regulate entities carrying out insurance and reinsurance activities and related insurance services, activities and professions. Accordingly, insurance companies providing cover for project assets must be duly licensed and comply with the applicable FRA regulatory requirements.

With regard to the fees applied to insurance policies, the Unified Insurance Law requires insurance companies to pay an annual regulatory fee to the FRA, calculated by reference to their direct insurance premiums and the type of insurance.

As for taxes, insurance services are generally exempted from VAT under the Egyptian VAT framework. However, Law No 111 of 1980 (the “Stamp Duty Law”) imposes stamp tax on insurance premiums and consideration at a rate of 11%, subject to a minimum of EGP1. In addition, the Stamp Duty Law provides that stamp tax on insurance premiums and insurance consideration is borne equally by the insurer and the insured, with the tax being assessed on the aggregate premiums and consideration and the insurance company being the party liable to account for it.

Notably, it is customary in project finance transactions for lenders or a security agent to be named as first-loss payee or beneficiary (as applicable) and for appropriate lender protections to be incorporated into the relevant policies and endorsements.

Under Egyptian law, there are generally no restrictions preventing foreign creditors from receiving amounts payable under insurance policies. In project finance transactions, foreign creditors may be designated as first-loss payee or beneficiary under the relevant insurance policies, as further discussed in 7.1 Restrictions, Controls, Fees and/or Taxes on Insurance Policies.

It is worth highlighting that, where insurance proceeds payable to foreign creditors are to be remitted outside Egypt, the transfer of such proceeds in a foreign currency would remain subject to the applicable Egyptian banking and foreign-exchange rules and procedures prescribed under the CBE Law.

Where interest is paid by an entity that is resident in Egypt – or by a non-resident entity that maintains a permanent establishment in Egypt – to a non-resident recipient, such payments are generally subject to a 20% withholding tax on the gross amount, without deduction of costs. The withholding tax may, however, be reduced or eliminated where an applicable double taxation treaty provides for a lower rate or exemption, subject to satisfaction of the relevant treaty conditions.

The payer is responsible for withholding and remitting the tax to the Egyptian Tax Authority within the statutory deadline, which is the first working day following the date of withholding.

Certain statutory exemptions may also apply to interest on specified loans and credit facilities, including particular financing obtained by public juridical persons and – subject to transitional provisions – certain loans and credit facilities obtained by public-sector, public business-sector and private-sector companies. The availability of any exemption should be assessed by reference to the nature and terms of the relevant financing and the applicable provisions in force at the time of payment.

Under the Stamp Duty Law, banks are generally subject to stamp duty at a rate 40 basis points (ie, 0.4%) per annum on the highest outstanding balance of loans and credit facilities extended during the financial year. This duty is shared equally between lender and borrower, with the lender responsible for paying it to the authorities in quarterly instalments. The statutory allocation of the duty between the lender and borrower should be distinguished from any contractual agreement between the parties as to the economic burden of the duty.

Because the tax operates on a territorial basis, the duty generally applies to credit facilities extended by banks operating in Egypt. Facilities granted by foreign banks that do not operate through an Egyptian presence may fall outside its scope, subject to the specific circumstances of the financing.

Other taxes and charges may arise depending on the structure of the financing and the nature of the relevant transaction, including taxes or fees associated with the creation or registration of security.

Under the Egyptian Civil Code, the general statutory ceiling for agreed interest is 7% per annum. Any interest agreed above this rate is – as a general rule – subject to reduction to the statutory ceiling, with certain restrictions also applying to commissions or other benefits that may constitute disguised interest.

That said, the statutory framework applicable to commercial and banking transactions provides important exceptions to the general Civil Code ceiling. Notably, licensed banks are not subject to the Civil Code’s 7% ceiling in respect of banking operations, with interest rates for such operations governed by the applicable banking and CBE framework.

Accordingly, the applicable interest limitations depend on the nature of the transaction and the status of the lender. For loans provided by licensed banks, the 7% Civil Code ceiling would generally not apply to the relevant banking operation. For non-bank lending, the position should be assessed by reference to the nature of the transaction and the applicable statutory framework.

Project agreements in Egypt are generally governed by the law chosen by the contracting parties, in accordance with the principle of freedom of contract under the Civil Code, provided that the choice of governing law and the contractual terms do not conflict with Egyptian public order or public morals.

Accordingly, the parties may agree on the governing law applicable to their project agreements, which may be Egyptian law or a foreign law. English law is the most commonly chosen foreign law in practice.

However, there are certain exceptions where Egyptian law is mandatorily required to govern specific agreements. Most notably, agreements relating to a PPP transaction must be governed by Egyptian law in accordance with Article 35 of the PPP Law.

Financing agreements are commonly governed by either Egyptian law or English law.

The general rule is that the parties may elect any law as the governing law of their relationship unless it is mandatory to choose Egyptian law as per applicable regulations.

Typically, certain security documents remain subject to Egyptian law either owing to legal requirements or for ease of enforcement. As noted in 9.1 Project Agreements, certain sectors require Egyptian law to apply.