A new credit package has been devised by Commercial International Bank (Egypt - CIB)to support the conversion of taxis to compressed natural gas (CNG).
The facility will entail drivers borrowing from the service stations the £E 3,000-5,000 ($650-1,085) required to convert their vehicles to CNG. All drivers of CNG-fuelled vehicles will need to use swipe cards to fill up their tanks. If they owe money, they will be charged £E 0.90 ($0.20) a cubic metre (equivalent to a litre of petrol); if they do not owe anything, the charge will be £E 0.45 ($0.10) a cubic metre. These prices compare with a petrol price of £E 1 ($0.22) a litre.
Drivers will be encouraged to present collateral for the loans in the form of life insurance and car insurance policies.
CIB says it has obtained a point-of-sale (POS) technology package for the new facility, put together by a local firm under licence from an international supplier. The bank says it expects total loans provided to reach £E 200 million ($43 million).
At present, there are three CNG operating companies, all involving foreign oil companies in joint venture with local partners. Natural Gas Vehicles Company has been set up with BP of the UK; Egyptian International Gas Technologyis an affiliate of Italy's Enigroup; and BG Groupof the UK and Edison International of Italy have stakes in a third venture, named Cargas. The Royal Dutch/Shell Groupis also preparing to launch CNG sales through its distribution venture, Fayoum Gas.
Egypt ranks ninth in the world in terms of vehicles converted to CNG, with a total of 35,000. The government is aiming to raise this to over 50,000 by the end of 2002. CNG sales during 2001 in Egypt totalled 165.5 million cubic metres, according to the International Association of Natural Gas Vehicles.
CIB says the new facility provides benefits for all the parties involved. 'The taxis get lower costs, the bank gets new revenue streams, and the operating companies are relieved of the administrative and financial headaches of chasing up the loans,' says a senior CIB executive. 'The Environment Ministry is also very pleased, as the scheme will help reduce pollution in major cities.'
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