The German Development Bank (KfW), on behalf of the Federal Ministry of Economic Cooperation and Development (BMZ), on Sunday signed a debt swap agreement worth €54m with Egypt’s Ministries of International Cooperation and Electricity and Renewable Energy as well as the Central Bank of Egypt. This agreement exempts Egypt from paying debts worth €54m to be used to finance the transition to green energy in Egypt instead.
The German government had pledged during the COP27 Climate Change Conference in Sharm El-Sheikh in November 2022 to contribute significantly to Egypt’s Nexus on Water, Food, and Energy initiative (NWFE) Energy Pillar. In line with this event, Germany has provided a total financing package of more than €250m – for the same purpose – including debt forgiveness, grants and very soft loans. The current debt swap supports the Egyptian government in achieving its goal of producing electricity from renewable energy sources by 42% by 2030, by financing investments that pave the way for this important initiative.
The project is to develop the transmission network to integrate renewable energies into the electricity transmission network and to strengthen it. In particular, the project contributes to the construction of two substations and the connection of two wind farms with a capacity of 500 megawatts each to the national transmission network.
The project will be implemented by the Egyptian Electricity Transmission Company.
German Ambassador to Cairo Frank Hartmann stated, “We are pleased to support Egypt on its path to energy transition through debt swaps. This would allow new investments in energy infrastructure and pave the way towards a green, liveable future for all Egyptians. The commitment we made during COP27 for our total contribution of more than €250m has finally been fulfilled.”