Egypt aims to increase green investments to 50% in 24/25 budget

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Mon, 28 Feb 2022 - 02:40 GMT

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Mon, 28 Feb 2022 - 02:40 GMT

Green investments- CC via Pick Pik

Green investments- CC via Pick Pik

CAIRO - 28 February 2022: The Egyptian government aims to increase the percentage of green public investments from 15 percent in the current fiscal year 2021/2022 to 30 percent in the new budget 2022/2023, and to 50 percent in the 2024/2025 fiscal year, according to Minister of Finance Mohamed Maait.
 
 
Maait elaborated during his meeting with members of the British Egyptian Business Association, that the increase of green investments comes in order to improve Egypt's competitiveness in the Environmental Performance Index.
 
 
He confirmed that there is a presidential mandate to expand green and sustainable financing in the coming years, in a way that contributes to achieving development goals with environmentally friendly projects, in cooperation with the “development partners” from the private sector, in line with the country's regional efforts to combat climate change.
 
 
The minister added that we [ the government] are keen to diversify the sources of financing investment projects, between dollar, green bonds and Eurobonds, and to move towards issuing sovereign bonds; which contributes to reducing the costs of financing comprehensive and sustainable development; hence, the sustainability of the public finance indicators, in order to preserve the economic gains that have been achieved.
 
Maait pointed out that the state succeeded in issuing the first sovereign green bond offering in the Middle East and North Africa, with a value of $750 million in September 2020, for five years at a yield of 5.250 percent, putting Egypt on the map of sustainable financing for the green economy.
 
He pointed out that this issuance witnessed a very high turnout from investors, as purchase orders exceeded the announced volume of "$500 million", equivalent to 7.4 times, and the "acceptable size exceeded $750 million", equivalent to 5 times, and that this issuance attracted 16 new investors from Europe, USA, East Asia and the Middle East, for the first time.
 
The minister explained that Egypt’s first sovereign green issuance won the “Pioneering Issuance in the Green Market” award and the “Sustainable Finance Award for the Best Sustainable Financing Deal.” The proceeds from this issuance were directed to the implementation of 15 national projects in many governorates in various fields, including: water and sewage projects in northern and southern Upper Egypt, the Dabaa desalination plant in Matrouh, the water treatment plant in the village of Arab El-Madabegh in Assiut, the water treatment plant in Mahamid in Aswan, and renewable energy and clean transportation projects, including: the “Monorail” project, which will serve the governorates of Greater Cairo, in a way that contributes to in achieving the sustainable development goals.
 
“We obtained the first green financing in November 2021 in the amount of $1.5 billion from a group of international and regional commercial banks, with a subscription that achieved high levels of demand, with a coverage ratio of more than 3 times, and this green financing is also subject to the framework of the sovereign green financing sources for Egypt and its revenues directed to financing green national projects, including, for example: water treatment and desalination plants, solid and medical waste management and treatment, rehabilitation and lining of canals, completion of the second phase of West Port Said projects, and water desalination projects,” he stressed.
 
 
The minister indicated that the Egyptian government is preparing to host the 27th session of the Conference of the Parties (COP 27), to be held in Sharm El-Sheikh next November, as a pivotal opportunity for the whole world to work together to accelerate the pace of the climate action plan in accordance with to the principles of the Kyoto Protocol and the Paris Agreement, in a way that contributes to the implementation of what was agreed upon during previous climate change conferences.
 
 
 
 

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