Opinion| Egypt: The source of climate-conscious solution-building

Sherine Shohdy
8 Min Read

Africa is best placed to lead climate action; the time has come to leverage Egypt’s role as host of COP27 in support of Africa’s future generations

Africa is in a unique position in the climate debate. The region harbours some of the world’s most valuable and desired natural resources. Central Africa’s Congo Basin is home to the world’s second-largest tropical rainforest region and plays a pivotal role in climate change mitigation, soaking up 1.2 tonnes of carbon dioxide each year. 

Our natural assets tackle climate change. Our continent contributes the least to it, but our home is still the most vulnerable to its effects. To boost climate resilience, we must balance our need for climate adaptation with an approach to economic growth that sustainably empowers Africa’s future generations. 

Our vast population and economies embody the potential requisite for success. We have demonstrated on the world stage at COP26 that a united Africa is determined to bring climate change into check. The levels of finance committed at COP26 surpassed $20bn. With funds from the US, France, Germany, the UK, and the European Union devoted to assisting South Africa’s energy transition from coal, and a collective pledge from a consortium of developed economies initially assigning at least $1.5bn in financing between 2021 and 2025 to protect and maintain the Congo Basin forests and peatlands – we are collectively moving in the right direction.

But as COP26 has come to an end, we must turn our focus towards the crucial work ahead, which is the urgent delivery of a legion of promises made at this year’s gathering. Given how high the stakes are for Africa, time is against us – business leaders, governments and communities across the continent must stimulate more alliances in action. COP27 in Egypt will be an ideal platform to progress to the next stage of necessary collaboration, where Africa will lead the fight against the climate crisis.

Egypt: the source of climate-conscious solution-building

As a frontrunner in developing climate-smart solutions, Egypt can represent the spirit and enormous potential to be harnessed throughout Africa. During a speech at the conference in Glasgow, President Abdel-Fattah Al-Sisi explained how the climate emergency encouraged Egypt to put in place a sustainable development model centred on increasing green projects to 50% by 2025 and 100% by 2030. As a result, further investment is set to expand renewable energy capacity from 3.51 GW in 2020 to 13.7 GW in 2030. This progress will be possible due to funds raised through our country’s first green bond, issued in September 2020. The $750m bond was five times oversubscribed, highlighting the tremendous prospects for clean and green investments throughout Egypt.

On average, Egypt receives between 2,800 to 3,200 hours of sunshine annually. Our country benefits from solar irradiation of 1970-3200 kWh/m2 per year; Egypt has the highest solar potential globally. Leveraging natural capital from the sun, the Benban Solar Park in Aswan, supported by Globeleq, a CDC Group investor, is the largest solar energy project worldwide – generating up to 1,600 megawatts of energy. The initiative also reduces carbon emissions by 2 million tonnes annually.

We know that financial assistance from international investors of developed economies is a valuable part of the equation. However, the region’s resilience must also be unlocked by blending home-grown development programmes and tailor-made, targeted financing solutions. Approaches such as these can fully leverage our continent’s natural endowments and drive inclusive responses to the challenges we face.

Agriculture in Egypt accounts for approximately 11% of GDP and over 20% of jobs. It is the largest economic sector in our country – as it is in many countries across the continent. This means we are becoming more exposed to the threat of environmental degradation, higher input costs and the inequalities climate change exacerbates between the global north and south. Therefore, further investment in climate-smart agriculture practices, research into evolving varieties of crops and technologies to support farming and improved water management solutions – is fundamental – these are areas in which we are actively looking for opportunities to invest.

Egypt receives 90% of its water from the River Nile. It provides the country with most of its potable water; it supports agriculture, fish farming and power generation. But reduced and unpredictable rainfall because of the climate crisis means that these vital industries are now highly vulnerable. Indeed, experts believe that the country will face a nationwide freshwater shortage as soon as 2025. Egypt has already surpassed the internationally defined threshold for water scarcity and edges close to “absolute water scarcity”, defined by the UN as less than 500 cubic meters of water per person per year. As such, CDC is directing its efforts to support the sustainable development of desalination, wastewater treatment, sanitation and hygiene projects that help address where water is in scarce supply.

Solutions are gaining ground, but we can do more

The consortium between Egypt’s National Military Production Authority and MPS Infrastructure, a project development company operating in Africa and a US water management technology provider Aquatech is a prime example of how strategic collaboration can support local economies. The project will lead to more electricity and chemical efficient water treatment projects and manufacturing for desalination plants and wastewater treatment to make water more affordable for households and farmers.

In Egypt, where just 25% of women work outside of the home, they also account for 43% of the agricultural workforce, even though they disproportionately lack access to adequate agricultural land, financial support, and education. 

We must do more.

In Egypt specifically, women and children can comprise 80% of those displaced by climate-related disasters, yet women are largely overlooked in climate change strategies and excluded from decision-making. Therefore, adaptation strategies must also factor in the role of our women. For example, the 2X Challenge and Gender Finance Taskforce, supported by the EIB, CDC, and DEG, aims to multiply climate investments that recognise women’s roles in leading climate action. 

CDC’s permanent presence in Egypt has enabled us to support the transformative force of action that this country creates – through partnerships, collaborations, and locally rooted companies. 

As we seek to accelerate innovation in family-owned businesses, larger companies, entrepreneurs and more, our patient capital and expertise help secure impact at scale. As an impact investor, CDC is committed to working closely with our country and continent to continue raising the momentum towards and beyond COP27 in Egypt as we deliver the sustainable development gains that empower those where it is needed the most.

Sherine Shohdy: Coverage Director, Egypt, CDC Group

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