The conversion, financed by the MSMEDA, a government body overseen by the prime minister, will be carried out through state-owned Car Gas and Gastec companies, a statement by the petroleum ministry said following the signing ceremony.
The event was attended by Petroleum Minister Tarek El-Molla and Trade and Industry Minister Nevine Gamea, who is also the MSMEDA CEO.
The new contracts are part of a EGP 1.2 billion Go Green initiative to convert 150,000 private vehicles to run on natural gas instead of, or along with, gasoline within three years, Gamea said.
Under the Go Green initiative, launched in January, around 50,000 to 70,000 cars will be converted each year, with an annual cost ranging EGP 400-600 million.
Egypt, with over 1.3 million cars on the street for over 20 years, adopted the Go Green programme to preserve the environment and make use of the country’s plentiful natural gas production, resulting from recent oil discoveries.
The MSMEDA previously provided financing of up to EGP 452 million to convert more than 72,000 vehicles to run on natural gas, Gamea said following the signing.
The step will help reduce fuel imports, decrease pollution from harmful emissions, and increase job opportunities in the transportation field, she added.
Egypt has recently doubled the number of natural gas fuelling stations to 375 nationwide, with plans to set up a grid of 1,000 gas stations across the country to support the presidential initiative.
The country is also aiming to scrap and replace up to 250,000 rickety cars, including microbuses and taxis, with new ones that operate on bi-fuel systems.