Minister of Finance Mohamed Maait said that there is a presidential mandate to expand green and sustainable financing in the coming years to achieve development goals with environmentally friendly projects.
This will take part in cooperation with development partners from the private sector as per the state’s regional efforts. He pointed out that the government aims to increase the percentage of green public investments from 15% this fiscal year to 30% in the new budget, and to 50% in FY 2024/25 in order to improve Egypt’s competitiveness in the environmental performance index.
This came during Maait’s meeting with members of the British Egyptian Business Association, where he affirmed the government’s keenness to diversify the sources that finance investment projects to include dollars, green bonds, and Eurobonds, as well as pay attention to sovereign sukuk, which contribute to reducing the costs of financing comprehensive and sustainable development; hence, the sustainability of public finance indicators to preserve the economic gains achieved.
Maait highlighted Egypt’s success in issuing the first public offering of sovereign green bonds in the Middle East and North Africa with a value of $750m in September 2020 for five years at a rate of return of 5.25%, which puts Egypt on the map of sustainable financing for the green economy.
He pointed out that this issuance witnessed a high turnout from investors, with purchase demand exceeding $500m — equivalent to 7.4 times — and exceeding the accepted volume of $750m — equivalent to 5 times. This issuance also attracted 16 new investors for the first time from Europe, the US, East Asia, and the Middle East.
Furthermore, he explained that this issuance won the Green Bond Pioneer Award and the Sustainable Finance Award for the best sustainable financing deal. He noted that the proceeds from this issuance were directed to implement 15 national projects in many governorates in various fields, including water and sanitation projects in North and South Upper Egypt, Al-Dabaa desalination plant in Matrouh, a water treatment plant in the village of Arab Al-Madabegh in Assiut, a water treatment plant in Mahamid in Aswan, in addition to renewable energy and clean transportation projects, including the monorail project, which will serve the governorates of Greater Cairo to help achieve the sustainable development goals.
Additionally, Maait indicated that Egypt obtained its first green finance in November 2021 at a value of $1.5bn from a group of international and regional commercial banks, with a subscription that achieved high levels of demand with more than three times the coverage ratio.
He pointed out that this green finance is also subject to the framework of sovereign green financing sources. Egypt and its revenues are directed to finance national green projects, including water treatment and desalination plants, in addition to solid and medical waste management and treatment, the rehabilitation and lining of canals, constructing the second phase of western Port Said projects, and water desalination projects.
Maait added that the Egyptian government is also preparing to host the 27th session of the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP 27) in Sharm El-Sheikh in November under the slogan ‘Together for Implementation.’
The COP 27 will be a pivotal opportunity for the whole world to work together to accelerate the pace of the climate action plan in accordance with the principles of the Kyoto Protocol and the Paris Agreement.
This is expected to push the implementation of what the countries that participated in previous climate change conferences pledged to do as well as come up with recommendations and serious executable initiatives and reduce harmful emissions resulting from global warming, along with supporting the efforts of African countries to mitigate the repercussions of climate change and update Egypt’s national contributions in the Paris Agreement.
He explained that among the initiatives that have been implemented to combat climate change is the initiative to replace old vehicles with new ones that operate on natural gas.
Additionally, a stimulus package to localise the electric car industry in Egypt is expected to be approved in the coming months.