Egypt's Government has approved a significant E£50bn ($1.03bn) funding initiative aimed at bolstering the hotel sector, a move that is expected to stimulate the country's tourism industry, reported Arab News.

The funds will facilitate the construction and operation of new hotel rooms, expansion of current projects and the conversion of non-operational buildings into hotels.

This financial boost is part of the Ministry of Tourism and Antiquities' broader strategy to attract 30 million tourists annually by 2038.

The country plans to add between 240,000 and 250,000 new hotel keys to meet the projected demand.

Priority will be given to developing hotel rooms in key tourist destinations such as Luxor, Aswan, Greater Cairo, and regions along the Red Sea and South Sinai, including popular areas such as Sharm El Sheikh, Taba, Nuweiba, and Dahab.

The first half of this year saw a surge in Egypt's tourism revenue, with the sector's earnings increasing by 4.7% year-on-year to $6.6bn. This growth is attributed to the notable rise in tourist arrivals, which reached 7.06 million, surpassing the previous peak of 6.9 million visitors in 2010.

According to a statement from the Egyptian cabinet, the Ministry of Finance will fund the initiative, allowing for the completion of construction, equipment, or finishing work on buildings that have not yet obtained a hotel operating license.

The ministries of Finance, Tourism and Antiquities, and Investment and Foreign Trade have outlined the main conditions of the initiative, which include credit availability based on business volume and banking regulations.

The maximum financing limit for a single client is set at E£1bn, or E£2bn for a client and its related parties, accessible through a maximum of two banks.

Applications for the initiative will open within one month of its announcement and will be available for 12 months. The maximum drawdown period is 16 months, with a final deadline of 30 June 2026.

Companies benefiting from the initiative must secure an operating license within six months following the drawdown period. They will also enjoy a reduced interest rate of 12%, with the Ministry of Finance covering the difference between this rate and the Central Bank's discount rate in addition to 1%.