Cost of the Loan

Interest Rates

Kafalat Energy guaranteed loans may only be granted in Lebanese Pounds. The maximum interest rate applied for the Kafalat Energy loans is 3%.

Subsidy

The interest subsidy is the same for all subsidized loans, currently at 4.5%. The duration of the subsidy is maximum 7 years, beyond which the Central Bank will no longer subsidize the interest.

Kafalat Fee

The Kafalat fee consists of a 2% yearly commission of the outstanding value of the guarantee. The value of the guarantee is 75% of the loan value approved by the bank and Kafalat.

Fiscal stamps are charged once on the Letter of Guarantee and are calculated at 0.3% of the value of the guarantee.

Therefore, the final cost at Letter of Guarantee issuance would be equal to:

[(Loan Value + interest accrued during grace period + interest accrued for 3 months) x 75% x 2%] + [(Loan Value + interest accrued during grace period + interest accrued for 3 months) x 75% x 0.3%]

 

Example

For a loan over 10 years, the interests applied currently (subsidy = 4.5%) are:

 

Year 1 to Year 7

Year 7 to Year 10

Interest paid by Client after Subsidy

0% of loan amount

3% of loan amount

If the interest subsidy is lowered to 2.5%, the interests and fees applied will be:

           

Year 1 to Year 7

Year 7 to Year 10

Interest paid by Client after Subsidy

0.5% of loan amount

3% of loan amount