Three international development banks have teamed up with the European Union (EU) to promote green investments in Egypt, supporting projects to boost energy efficiency and the development of renewable energy sources in the country at a time of rising energy prices.
The European Bank for Reconstruction and Development (EBRD), the Agence Française de Développement (AFD), the European Investment Bank (EIB) and the EU launched their new Green Economy Financing Facility (GEFF) for Egypt during an event in Cairo attended by more than 250 participants, including government officials and representatives from the banking sector, business community, international institutions and civil society.
The GEFF is the latest in a series of similar programmes led by the EBRD. They have been rolled out so far in 24 countries in cooperation with 120 local financial partners, providing over €4 billion towards energy efficiency and renewable energy projects.
The €140 million programme for Egypt will provide loans for energy efficiency and small-scale renewable energy investments by private companies through a group of participating banks, with the aim of also achieving energy security.
The loans are combined with technical support to develop projects and with incentives for the successful completion of investments, thus producing a unique product aimed at promoting energy-efficient and renewable energy technology, raising awareness, reducing operating costs and improving competitiveness.
The programme is being supported by an EU grant of €23.8 million. The National Bank of Kuwait (NBK) in Egypt and the Qatar National Bank (QNB) AlAhli in Egypt are the first banks to participate in the new facility.
The European Union Neighbourhood Investment Facility (EU NIF) is providing the funds for incentives to complete investments, while the comprehensive technical-assistance package is jointly funded by the EU NIF and the EBRD’s Shareholder Special Fund.
Ambassador Ivan Surkos, Head of the EU Delegation to Egypt, said: “The European Union has provided a €23.8 million grant through the Green Economy Financing Facility to help dismantle the numerous barriers facing the private sector and preventing financial institutions, strategic investors and project managers from operating actively and efficiently in financing sustainable energy projects.”
Janet Heckman, EBRD Managing Director for the southern and eastern Mediterranean (SEMED) region, commented: “This facility is part of a new EBRD GEFF programme aiming at promoting better practices and raising awareness of the benefits of green economy investments. The GEFF programme in Egypt benefits from the expertise the EBRD has accumulated through investing in sustainable energy in 24 countries, and especially from its experience in providing finance through financial intermediaries.”
Stéphanie Lanfranchi, Country Director, Agence Française de Développement, Egypt, said: “The energy transition is the main challenge for the fight against climate change. With its partners, AFD seeks to mobilise networks of financiers in order to support renewable energy and energy efficiency investments in the region. We truly believe that private sector players have a key role to play in devising new, less polluting and more resilient development models.”
Christophe Lucet, Head of the European Investment Bank, Egypt, said: “During the launch event, real-life investment examples were presented, demonstrating how high-performance technologies can help companies stay competitive during times of increasing energy costs. In one example, an investment in a new glass furnace reduced natural gas consumption by 65 per cent and in the other example waste heat is used to generate 25 per cent of the electricity needs of a large industrial company.”
Egypt is a founding member of the EBRD and has been receiving funding since 2012. To date the Bank has invested €2.3 billion in 43 projects in the country. The EBRD’s areas of investment include the financial sector, agribusiness, manufacturing and services, as well as infrastructure projects such as power, municipal water and wastewater services and support for transport services. The EBRD has also provided technical assistance support to more than 500 small and medium-sized local enterprises.