The Micro, Small, and Medium Enterprises Development Agency (MSMEDA) is financing the conversion of cars to the bi-fuel gasoline/CNG system, according to Hani Emad, Head of the agency’s Central Sector for Financing Small Enterprises.
The fund is being provided to Cargas and Gastec, the two companies responsible for undertaking the conversion of vehicles to natural gas. The companies are currently offering a range of instalment programs for the conversion, including a one year interest-free system, and a payment option extending from two to five years.
The cost of the financing program stands at EGP 1.2bn, and is intended to convert 147,000 cars over a period of three years. The average cost of converting a car to run on CNG stands at about EGP 8,000, with MSMEDA set to provide an annual sum of EGP 200m to each company to convert 25,000 cars.
Emad said the agency has contracted with banks to provide the necessary financing to the intermediary, whether it is a company or a bank. The banks will finance the beneficiaries under the conditions specified by MSMEDA.
He explained that the state is subsidizing the cost of the conversion to match the financial capacity of each car owner. Cargas and Gastec will import the conversion devices that are required to conform to European specifications, provided that the companies bear the difference in the cost of importing these devices.
Emad also commented that the agency is lending its unconditional and unreserved support to all conversions, whether the vehicles are microbuses, taxis or passenger cars. He stressed that the main goal of the initiative is to encourage consumers to convert their cars to work on natural gas, because of its economic and environmental benefits.
Moreover, the Ministry of Industry and Trade is negotiating with Egyptian vehicle manufacturing companies to guarantee that the conversion will take place with Al-Amal and Suzuki Egypt, the two companies assembling microbus vehicles locally. Emad pointed out that this project has been integrated within several national projects, such as the project replacing and renewing microbus vehicles that have been on the roads for 20 years or more.
He added that the state is also implementing a project to replace and renew dilapidated microbuses, minibuses, and taxis through several stages. The first stage began with the replacement of 15,000 microbuses across seven governorates, as part of the project replacing 80,000 microbuses nationwide over the course of four years.
There has also been a phase launched to renew and replace 12,000 white taxis, bringing the total number of vehicles replaced over one year under the first phase to 27,000, reported Daily News Egypt.