September 16, 2020. The Micro, Small, and Medium Enterprises Development Agency (MSMEDA) is financing the conversion of cars to the dual petroleum/compressed natural gas (CNG) system, according to Hani Emad, Head of the agency’s Central Sector for Financing Small Enterprises.
The financing is being provided to Cargas and Gastec, the two companies responsible for undertaking the conversion of vehicles to the new system. The companies are currently offering a range of installments programs for the conversion, including a one year interest-free system, and a payment option extending from two to five years.
He explained that the cost of the financing program stands at EGP 1.2 billion, 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 200 million to each company to convert 25,000 cars.
Emad added that 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.
The official added 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.