Egypt was the top recipient of the European Bank for Reconstruction and Development (EBRD)’s investments among southern and eastern Mediterranean (SEMED) countries last year, according to Minister of International Cooperation Rania Al-Mashat.
The EBRD financing in Egypt exceeded €1bn of a total €2.13bn granted to SEMED countries, in 48 projects across the region.
While the repercussions of the novel coronavirus (COVID-19) pandemic led to a decline in development gains globally, it also demonstrated that extraordinary multi-sectoral and collaborative interventions are possible, the minister said.
These interventions are evidenced by Egypt’s partnership with the EBRD, which played an indispensable role in building back better. It also helped address significant short-term and long-term challenges, such as unemployment and climate change.
To kick-start the economy during the pandemic, the EBRD provided €784m of liquidity lines to local banks for on-lending to small- and medium-sized enterprises (SMEs). The financing allowed these businesses to protect jobs, and helped enterprises restart and reshape through the recovery phase.
Building an inclusive, green and resilient recovery, the bank also provided a $12m loan to Al Hayat Regency for the development of a new hotel in West Cairo. The project will generate more than 300 jobs and promote women’s inclusion through a high-quality training programme, funded by the Swiss State Secretariat for Economic Affairs (SECO).
The bank also placed the promotion of green investment as a central pillar in its comprehensive recovery strategy. The move was put in place to support one of the first green private-to-private projects in the country, with an initial $4.2m loan to TAQA PV for Solar Energy, TAQA Arabia’s renewable energy subsidiary.
In October 2020, Minister Al-Mashat participated in the annual EBRD meetings to chart the bank’s strategy for the next five years. The plan aims to bolster a resilient economy through accelerating green investment, as the EBRD is poised to become a majority green bank by 2025
The plan also aims to increase green financing to at least 50% of its total financing by 2025.
The bank’s Strategic and Capital Framework (SCF) 2021-2025 focuses on three main pillars, namely: transition to a green, low carbon economy; equality of opportunity; digital transition.
The goal to transition to a green economy aims to raise the share of green finance to at least 50%, and to reduce net CO2 by 25 to 40 million tonnes by the end of the SCF period.
Equality of opportunity will entail working with priority client segments, including women, youth and those in less developed regions.
In September 2020, Minister Al-Mashat and the EBRD’s SEMED region Managing Director Heike Harmgart published a joint op-ed article in state-run newspaper Al-Ahram outlining the role of multilateralism for a sustainable and resilient restart.
The article also illustrated how both partners aim to enhance effectiveness in “forging a new social compact” that is based on a set of core inclusive values. This will also see a range of projects implemented that are in line with the UN’s 17 Sustainable Development Goals (SDGs).
Egypt is a founding member of the EBRD. Since the start of the bank’s operations in 2012, the EBRD has invested over €7.1bn in more than 125 projects in the country, with a total private sector share of 74%.
According to the Ministry of International Cooperation’s 2020 annual report, the ministry secured development financing agreements worth $9.8bn during the year. Of this amount, $6.7bn went to financing sovereign projects, and $3.1bn went in support of the private sector.