The European Bank for Reconstruction and Development (EBRD), the European Union (EU) and the Green Climate Fund (GCF) announced on Tuesday, providing an additional $175.5m under the Green Economy Financing Facility programme (GEFF) in Egypt to support green programmes and investments for the private sector.
This came during the Green Economy Financing Facility (GEFF) event, “From pledges to implementation – boosting green finance in Egypt”. The amount will be made available to local financial institutions to on-lend to the private sector for investments in climate change mitigation and adaptation projects, supporting the decarbonisation and competitiveness of the Egyptian economy.
The event was attended by Minister of International Cooperation Rania Al-Mashat, Minister of Environment Yasmine Fouad, Head of the European Delegation to Egypt Christian Berger, and Central Bank of Egypt First Sub-Governor May Aboulnaga.
On the sidelines of her participation in the event, Al-Mashat said to Daily News Egypt: “One of the key aspects of our cooperation with the different partners, bilateral and multilateral is the facilities that are provided to the private sector. Sometimes it is not always very typical or understood in the market that a lot of the development finance is available to the private sector in different sizes; big corporations, small and medium-sized enterprises (SMEs) and startups.”
She explained that Tuesday’s event is a very important way to showcase the need to engage the private sector in the partnerships and financial agreements that the government sign with the EBRD, EU and other partners. “Of course today private sector engagement is underpinned by green finance.”
Al-Mashat further noted that each country has primate targets, but there is a common goal for everyone to work together to be able to meet one of the biggest challenges today which is climate change. So trying to encourage the private sector to think green and act green to make sure that the financial institutions and the financial sector are able to provide tools that are modern and innovative and can benefit from these facilities is also something else which is on the top of the agenda of the program particularly, the minister added.
“As a ministry of international cooperation, our portfolio involves all international institutions with the exception of the IMF. And all of them have facilities that are directed to the financial sector in Egypt. For instance, the EBRD has offered several credit lines with Egyptian banks since 2020. These credit lines are basically a very important mechanism to on-lend to the private sector in Egypt,” Al-Mashat noted.
Christian Berger explained to DNE that the partnership between Egypt and the EU is “vast” and that the green finance program is a follow-up on two things; the COP27 and Europe Green Deal. “So, we are very much interested in green financing around the world and Egypt is actually a very good partner in that.”
He added that Egypt has its own initiatives such as “the green ponds” which Egypt is the first country to issue green ponds. “We are working with the EBRD and other banks to increase our financing in the green sector in a variety of sectors starting with energy, production and consumption. We are working with EBRD to hand out or to pass on loans and financing to companies to change to a more environmentally friendly production,” Berger said.
Heike Harmgart the Managing Director for the Southern and Eastern Mediterranean (SEMED) region at the EBRD, said: “We are very proud to strengthen our green investments in Egypt through the GEFF and GVC programmes, along with the help of our strong partnership with the EU and GCF. These unique programmes have proven their success in the country throughout the years and we hope to continue to build a greener and more resilient and inclusive economy with the valuable support of our partner financial institutions.”
Moreover, Egypt’s Minister of Environment Yasmine Fouad referred to 3 important sectors to support the green transition in Egypt, the first one is the waste management sector, and the second is the biofuel economy, and the third is nature-based solutions. Fouad pointed out the importance of restructuring the outlook of the banking sector in Egypt to become more understanding of climate finance.
During the event, the EBRD representatives, along with representatives from local partner banks, discussed their partnership under the GEFF and the Green Value Chain (GVC) Egypt programmes, and their role in greening value chains by facilitating business investments in green technology.