Feasibility Study in Egypt: What Banks Trust

Most feasibility studies are written to get a yes, and that is exactly why banks discount them. An owner in Egypt needs a loan, a partner or a board approval, so a consultant produces a thick report with rising sales, a healthy internal rate of return and a five-year plan that never goes wrong. The credit officer reads the first page, checks three assumptions, and either asks for more or quietly says no.

This article is about the feasibility study in Egypt that banks and investors actually trust. My view after 25 years as a CFO: a credible study is not the one with the best numbers. It is the one that shows the reader exactly where the project breaks, and proves the owner has already seen it. In today's Egyptian rate environment, that difference decides whether a project gets financed.

Why a feasibility study in Egypt gets rejected

The same weaknesses come up again and again when a lender or investor reviews an owner's study:

• Demand is assumed, not evidenced. "The market is large and growing" is not a sales forecast. Who will buy, at what price, and why from you?
• The discount rate belongs to another decade. A project tested at 12–15% in an environment where the central bank's overnight lending rate is 21% is not being tested at all.
• Nominal and real figures are mixed. Prices are inflated year by year but costs are left flat, or the discount rate ignores inflation that the cash flows include.
• Currency risk is invisible. Imported machinery, raw materials or a dollar loan are converted at today's rate for all ten years.
• There is no downside case. Only one scenario, and it is the optimistic one.
• Working capital is missing. The study funds the factory but not the stock and customer credit needed to run it.

The structure of a sound study has been standardised for decades. UNIDO's Manual for the Preparation of Industrial Feasibility Studies, first published in 1978 and revised in 1991, sets out the chapters a study should cover, from market and capacity through inputs, technology, organisation and implementation scheduling to financial evaluation, and notes that financial institutions increasingly rely on well-prepared studies to avoid cost overruns (UNIDO). Banks rarely reject a study for missing a chapter. They reject it because the numbers inside the chapters are not credible.

The rate test: what Egypt's current interest rates mean for your study

On 29 October 2026 the Central Bank of Egypt raised key policy rates by 100 basis points, taking the overnight deposit rate to 20% and the overnight lending rate to 21%, with the main operation and discount rates at 20.5% (State Information Service, citing the CBE). Annual urban headline inflation was 13.9% in September 2026, according to the same reporting of the decision.

Two consequences for any Egyptian-pound feasibility study:

1. The hurdle rate must sit above the cost of money. When the central bank's own overnight deposit rate is 20%, a project's return has to clear the cost of money comfortably, with a premium for the project's own risk. The right premium depends on the sector and the sponsor; what matters is that the study states it and justifies it.
2. Inflation must be treated consistently. If revenues and costs are projected in nominal pounds, including expected price increases, the discount rate must be nominal too. If they are in today's prices, use a real rate. Mixing the two is the most common technical error in the studies owners show to banks.

Example: a project that looks good at 15% and fails at 25%

Example (illustrative, assumptions stated): a manufacturing line costing EGP 45 million. Year-one revenue of EGP 60 million, a 35% contribution margin and EGP 10 million of fixed costs give a year-one cash flow of EGP 11 million. Revenue and fixed costs both grow 12% a year in nominal terms. Six years, pre-tax, no residual value, before financing. The figures below are calculated from those assumptions.

Scenario	Year-1 cash flow (EGP m)	Return (IRR)	NPV at 15% (EGP m)	NPV at 25% (EGP m)
Base case	11.0	21.3%	+8.8	−4.2
Selling prices 5% lower, same costs	8.0	10.5%	−5.9	−15.3
Start-up delayed by one year	0 in year 1	11.3%	−5.5	−16.4

Tested at 15%, the base case looks attractive. Tested at an illustrative 25%, a nominal hurdle above the 21% overnight lending rate, it destroys value, and its 21.3% return is barely above the cost of borrowing. A 5% price cut or a one-year delay halves the return. A bank will run exactly these tests. A study that runs them first, and shows how the owner would respond (a supply contract, a fixed-price construction agreement, a smaller first phase), earns credibility the optimistic version never will.

What a bankable feasibility study in Egypt includes

• Evidence of demand: signed letters of intent, distributor commitments, tender pipelines or at least primary research with named customer segments.
• A capital budget with quotations, not estimates, plus a contingency line and the currency of each item.
• Working capital built from realistic collection, inventory and payment days.
• A financing plan showing the debt service coverage each year, not only the return on equity.
• Three scenarios (base, downside, severe) and a sensitivity table on price, volume, input costs, the exchange rate and the start-up date.
• A clear statement of the discount rate and whether figures are nominal or real.
• The owner's own equity and track record. Lenders back sponsors as much as projects.

If the project needs a value for an existing business that will be contributed or used as security, an independent business valuation belongs alongside the study. If you have never built the margin and break-even logic underneath, our free pricing and break-even scenarios template is a useful starting point.

A 7-question credibility test before you send it to a bank

1. Can you name the first ten customers and explain why each will buy?
2. Is every major capital item backed by a quotation dated within the last three months?
3. Is the discount rate stated, justified, and above the current cost of money?
4. Are revenues, costs and the discount rate all nominal, or all real?
5. Does the study show what happens if prices fall 5%, costs rise 10%, or the start is delayed a year?
6. Is foreign-currency exposure shown separately, with a weaker-pound scenario?
7. Does the financing plan show the business can service its debt in the downside case?

Any "no" is a question the bank will ask for you, usually at the worst moment.

Common mistakes

• Writing for approval instead of for decision. The study should help the owner decide whether to invest, not only persuade someone else.
• Copying a template's assumptions. Growth rates and margins from another sector or another year are the first thing an analyst checks.
• Ignoring the time to reach capacity. New plants rarely run at full capacity in year one.
• Forgetting taxes, fees and financing costs when presenting returns to equity holders.
• Not updating the study after rates, prices or the exchange rate move. A study is a model to maintain, not a document to print once.

Frequently asked questions

What does a bank in Egypt look for in a feasibility study?

Banks look for evidence of demand, a capital budget backed by quotations, realistic working capital, and proof that the business can service its debt even in a downside scenario. They also assess the sponsor's own equity and track record. A clear sensitivity analysis on price, costs, the exchange rate and delays carries more weight than an optimistic headline return.

What discount rate should I use for a feasibility study in Egypt?

There is no single correct rate, but in Egyptian pounds it should sit above the current cost of money and include a premium for the project's risk. After the Central Bank of Egypt's October 2026 decision, the overnight lending rate is 21%. State the rate you use, justify it, and keep it consistent with nominal or real cash flows.

How long does it take to prepare a feasibility study?

It depends on the project's size and the data available. A focused study for an expansion of an existing business can take a few weeks; a new industrial project with market research, technical design and financing structure takes longer. The slowest part is usually gathering credible market evidence and supplier quotations, not building the financial model.

What is the difference between a feasibility study and a business plan?

A feasibility study tests whether a specific project is viable before committing money, including its risks and alternatives. A business plan describes how an approved business will be run and grown. Banks often ask for both: the study to justify the investment, and the plan to show how management will deliver it.

Where to start

Before commissioning a full study, write one page with your demand evidence, the capital cost with its currency mix, your discount rate and the three things that would make the project fail. If that page is hard to write, the full study will not be credible either.

If you want a senior finance professional to stress-test your study before it reaches a bank or investor, book a free 30-minute consultation with Axcell Financial Consulting, or read how a fractional CFO can lead the process.

Sources

• State Information Service (Egypt), Egypt's central bank raises key interest rates by 1%, citing the Central Bank of Egypt's Monetary Policy Committee decision (29 October 2026; accessed 10 November 2026).
• Enterprise, CBE hikes for the first time since March 2024 (1 November 2026; September 2026 headline inflation of 13.9% as cited in reporting of the decision; accessed 10 November 2026).
• UNIDO, Manual for the Preparation of Industrial Feasibility Studies, revised and expanded edition (W. Behrens and P. M. Hawranek, Vienna, 1991; first published 1978; accessed 10 November 2026).

The worked example is illustrative, with its assumptions stated in the text; all figures are calculated from those assumptions. The credibility test is Axcell's recommended approach.