Egypt Launches 2nd Stage of Green Economy Financing Program Worth $175 Mln
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Tuesday - 31 January 2023
On Monday, the Egyptian Minister of International Cooperation and Governor of Egypt at the European Bank for Reconstruction and Development (EBRD) Dr. Rania A. Al-Mashat witnessed the launch of the second phase of the Green Economy Financing Facility Egypt II – GEFF Egypt II and greening value chains for the private sector, with a value of $175 million.
This comes as a result of the effective partnerships between the Government of Egypt and the EBRD to stimulate the participation of the private sector and increase its role in development efforts in Egypt.
The second phase of the program was launched during an event titled “From Pledges to Implementation: Boosting Green Finance in Egypt” in the presence of H.E. Dr. Yasmine Fouad, Minister of Environment, H.E. Christian Berger, Ambassador, Head of the European Union (EU) Delegation to Egypt and Dr. Heike Harmgart, Managing Director for the Southern and Eastern Mediterranean region at the EBRD in addition to a number of financial and banking institutions in Egypt and development partners.
Through the second phase of the program, which is being implemented in partnership with the EBRD, financing estimated at $175 million will be directed specifically to micro, small and medium enterprises (MSMEs), with the aim of supporting their participation in development, creating more job opportunities, and enhancing the sustainability and resilience of value chains. During the first phase of the program, concessional financing of $157 million was made available to a number of financial institutions, which contributed to financing 101 projects to advance green transition and reduce harmful carbon emissions.
In her speech, Al-Mashat stressed the constructive partnerships with the EBRD to support development efforts at the government and private levels through concessional development financing, technical support and technical consultancy, noting that bank is a key partner in many projects that have stimulated the growth of the private sector and contributed to supporting its ability to participate effectively in achieving sustainable development and the transition to a green economy.
She also pointed out that through the second phase of the Green Economy Financing Facility Egypt II – GEFF Egypt II, financing will be made available to the private sector to enhance its competitiveness, increase investments in MSMEs, and provide technical support to support the comprehensive and sustainable growth of these enterprises. H.E. noted that the programme is the product of multilateral cooperation between the EBRD, the AFD, and the EIB to support growth and the green transition in Egypt, address the impacts of climate change and its negative impacts on the environment.
The Minister noted that the program strengthens the already existing partnership between the Arab Republic of Egypt and the EBRD, which was strongly reflected in the performance of the private sector, pointing out that the bank provided development financing worth €1.3 billion in Egypt during the past year, which strengthened Egypt's leadership and operations within countries in the SEMED region in 2022. These funds were allocated towards around 25 projects in the field of promoting green economy, stimulating sustainable development efforts, and supporting inclusion and gender equality.
Al-Mashat revealed that the private sector was the largest beneficiary of the EBRD's investments in Egypt by more than 70%, which reflects the endeavor towards implementing the state's vision to expand the base of private sector participation in development through international partnerships, noting that 59% of the bank's investments in Egypt during the past year were directed towards the transition towards a green economy, and 62% of these investments promoted social inclusion and integration efforts for youth and women.
The minister continued to say that these indicators reinforce the efforts made with development partners to expand the mechanisms and tools of blended and innovative financing with the aim of stimulating the growth of the private sector, which makes up for $7.3 billion in these past three years, and is part of the total concessional development financing secured. She also mentioned that in addition to technical support and technical advisory efforts, work is being done vigorously to increase partnerships aimed at advancing the participation of the private sector in development so that it comes as a main focus in all future strategies with multilateral and bilateral development partners.
The Minister touched on the National Country Climate Strategy 2050 and the update of the Nationally Determined Contributions (NDCs), which formed the cornerstone for the launch of the Nexus for Water, Food and Energy (NWFE) program, which promotes green transformation efforts and climate action in Egypt through private sector investments and facilitated development financing, pointing out that the EBRD is the main development partner in the energy pillar of the program.
She also pointed to the strong partnership with the EU and the European Commission, explaining that during the COP27, several agreements were signed with development partners, including the EBRD and the European Union, to expand green transformation efforts, generate green hydrogen, and increase Egypt's contribution to climate action globally.
It is worth noting that Egypt is one of the founding members of the EBRD, and in 2012 Egypt became a full-fledged operations country, and since that date, the bank has pumped investments estimated at €10 billion in approximately 160 projects, more than 70% of which were directed to the private sector.
