Egypt’s Ministry of Transport has decided to fully finance the modernization of Cairo Metro’s Line 2 trains from the state budget, stepping back from a previously announced plan to use foreign funding, a senior official at the National Authority for Tunnels (NAT) told Al Manassa.
The official, who requested anonymity, said the project’s total cost exceeds 12 billion Egyptian pounds, and that the government abandoned a proposed 200 million euros loan after failing to reach final agreement with international lenders on repayment terms and grace periods. He added that most spare parts for the project will now be sourced locally, as several foreign suppliers have begun establishing factories inside Egypt, reducing the need for external financing.
However, the decision appears to contrast sharply with an announcement made a month earlier by the Spanish rolling stock manufacturer CAF (Construcciones y Auxiliar de Ferrocarriles). On 18 Sept. 2025, CAF said it had secured three contracts worth more than 450 million euros with NAT to modernize 39 train units on Metro Line 2 and provide maintenance services for Lines 1 and 2.
CAF’s statement noted that the contracts would be financed through Spain’s Business Internationalisation Fund (FIEM)—a state-backed credit instrument managed by the Spanish Secretary of State for Trade, aimed at supporting Spanish companies abroad. The company described the project as a key part of Egypt’s “ambitious plan to expand and upgrade transport infrastructure,” and emphasized that it would “extend the service life of Line 2 trains by 20 years.”
But according to the NAT board member who spoke to Al Manassa, the final version of the agreement now relies mainly on domestic financing, rather than FIEM loans, signaling a shift in Egypt’s borrowing policy amid rising external debt and persistent foreign currency shortages.
The source said the upgrade and maintenance work will be carried out over four years, in successive stages to avoid disruptions to passenger services, with the contractor providing a two-year warranty after each train is refurbished.
The Ministry of Transport is moving to localize the production of railway components, partnering with firms such as Spain’s Coole Way, which has begun trial operations at the Kom Abu Radi workshops in Beni Suef, and France’s Alstom, which is building a new manufacturing complex in Borg El-Arab, Alexandria.
Transport Minister Kamel Al-Wazir has repeatedly stressed the government’s commitment to reducing reliance on foreign loans and encouraging local manufacturing, part of a wider strategy to manage Egypt’s fiscal and external balance pressures.
The Line 2 route, inaugurated in 1996, carries over one million passengers daily across 21.6 kilometers and 20 stations, from Shubra El-Kheima in the north to El-Mounib in the south. Most of its 39 original trains were built by Mitsubishi of Japan, with six newer trains delivered by Hyundai Rotem of South Korea in 2021.
