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Millions pooling up to Egypt to back green investment
The European Bank for Reconstruction and Development (EBRD), the European Union (EU) and the Green Climate Fund (GCF) are injecting millions to Egypt in response to the impact of the coronavirus pandemic on the Egyptian economy with an aim to boost green finance and develop value chains for the private sector.
Working with the EBRD’s local partner banks, two programs cumulatively worth €220 million will offer sub-loans to businesses for green investments in energy, water and resource-efficient solutions.
The programs are complemented by EU grants of more than €30 million and GCF concessional co-financing as well as technical assistance of up to $ 24 million.
The newly launched Green Value Chain program, with a volume of up to €70 million, will allow small and medium-sized enterprises (SMEs) to invest in advanced technologies and climate mitigation and adaptation solutions that improve competitiveness and enhance the development of green value chains.
The program also supports activities that enhance equal opportunities for men and women to access finance for green technologies and solutions.
The second program, an extension of the Green Economy Financing Facility (GEFF), aims to provide up to €150 million of green finance to SMEs across the agricultural, construction, commercial and manufacturing sectors.
The facility has already provided €140 million of energy efficiency financing in a previous phase through four partner banks, NBK Egypt, Alexbank and Arab African International Bank, all of which benefited from EU grants. The GEFF was initially piloted by National Bank of Egypt in 2014.
Loans under both programs cover investments in best available technologies such as energy and resource-efficient production machinery, renewable energy applications, agricultural irrigation and rainwater harvesting equipment, and many others. Clients can identify climate-friendly technologies with the help of the Green Technology Selector.
A webinar entitled “A green recovery: EBRD and EU green investments in the Egyptian private sector” promoted the Bank’s climate-resilience and energy-efficiency programs. It was attended by more than 200 representatives from the private sector, the Ministry of the Environment, Federation of Egyptian Industries, Confederation of Egyptian-European Business Associations, Federation of Egyptian Banks, participating financial institutions, and the EBRD and EU.
Heike Harmgart, EBRD Managing Director for the southern and eastern Mediterranean region, said “Egypt has great potential to build a low-carbon future and we are proud to work with our international partners to support the country in achieving a green economic recovery. The private sector is a key player in this process and has strong demand for green finance. We are pleased to build on our successful energy-efficiency programs and to announce our new Green Value Chain program aimed at greening SMEs, which are the backbone of the economy.”
“The European Union and Egypt cooperate closely to establish a green economy with a strong commitment to moving towards a low-carbon future and to making financial markets more sustainable. There is a need to incentivize green finance across the entire investment chain,” said Ambassador Christian Berger, Head of the EU Delegation to Egypt.
“Together with EBRD, EIB and AFD we have established the first Green Economy Financing Facility in Egypt which has served more than 100 industrial facilities to convert to low carbon schemes and today we are very proud to launch an extension of the successful facility.”