Financial Times publishes joint article by Int'l Cooperation Min., IFC’s Vice President on Egypt’s Leading Efforts in Green Economy

CAIRO – 2 February 2021: The FDI Intelligence platform in the Financial Times published a joint article by  Rania A. Al-Mashat, Minister for International Cooperation, and Sérgio Pimenta, Vice President of the Middle East and Africa at the International Finance Corporation (IFC), shedding light on the details of the green recovery in Egypt, and the efforts and policies applied by the government. 

Egypt’s Ministry of International Cooperation, in partnership with the private sector, is working to transform the country towards a green economy, within the framework of the first pillar of the Economic Diplomacy: Multi-Stakeholder Platforms. This is through which the Ministry of International Cooperation seeks to promote Egypt's development stories and international partnerships implemented with multilateral and bilateral development partners.

The article stated that Egypt has become a leading country in the Middle East and North Africa (MENA) region in terms of transitioning towards a green economy by promoting a clear strategy headed towards renewable energy and environmentally friendly projects. The Egyptian model is an inspiration for emerging countries and countries undergoing development transformations, according to the Solar Energy Outlook 2020 report.

During the past year, the Egyptian government approved the implementation of 691 environmentally friendly projects, including the electric train in Cairo and many renewable energy projects. The country also began issuing ‘green star certificates’ for hotels that implement environmental compliance policies, and it also succeeded in offering the first green bonds in the MENA region with a value of $750 million to finance the implementation of environmentally friendly projects.

Benban: The Largest Solar Park in the World

The Benban Solar Power Park project is a unique model of cooperation between relevant parties including the government, the private sector and international financing institutions, to implement the largest solar energy park in the world. This includes 6 million solar panels on an area of 36 square kilometer, and has been implemented by over 40 companies from across 12 countries. 

The solar power park generates 1,500 megawatts of energy and this enhances Egypt’s sustainable energy strategy, supports the use of clean energy, reduces climate change, and reflects the government's strong commitment to the transition towards a green economy.

The Benban Solar Energy Park supports SDG 7: Affordable and Clean Energy, SDG 8: Decent Work and Economic Growth, and SDG 17: Partnerships for the Goals. This project also curbs the greenhouse gas emissions and creates jobs that promote the growth of the Egyptian economy.

The commitment to transition towards a green economy is no longer merely an idea or vague concept, there are clear plans and action policies working to  enhance the sustainability of the energy sector in a way that reflects positively on citizens and in a way that also meets the excess demand for energy in light of the population increase. This is done through the 2035 Integrated Sustainable Energy Strategy that aims to produce 42% of the country’s electricity from renewable energy. 

With the issuance of the Renewable Energy Law No. 203 of 2014, the government began publishing incentives to encourage  the private sector’s entry  in the renewable energy field to support the country's green transformation strategy, and as a result of these efforts, many initiatives emerged such as the KarmSolar Company, the first private sector company specialized in energy production, was established. It obtained a license from concerned authorities, and this enabled Egypt to take its position as a leading country in MENA in terms of renewable energy. 

Al Mahmasa Water Reclamation Plan

With regard to projects in other sectors that support green recovery, the Al Mahmasa Water Reclamation Plan in the Sinai Peninsula region is the largest plant for treating agricultural wastewater in the world, enabling the state to irrigate 70 thousand acres of agricultural land through one million cubic meters of water per day. It also creates thousands of jobs and promotes community development.

Despite the achievements made, the complete transformation towards a green economy has its challenges. This change requires sound regulatory frameworks, long-term sources of financing, strong partnerships between countries and international financing institutions, and a clear government that is committed to the implementation of reforms. 

In this regard, the Ministry of International Cooperation holds strong partnerships with multilateral and bilateral development partners to enhance green recovery efforts, and the partnership with the IFC in particular is a unique model, as it is one of the institutions contributing to the financing of Benban’s Solar Power Plant implementation. 

The Ministry of International Cooperation conducted a match between the development funds of the IFC  provided to the private sector in Egypt with the United Nations Sustainable Development Goals (SDGs)  for the first time at the level of the countries of the region, where the volume of development funds from 2016-2019 amounted to $2 billion, 44% of which are directed to SDG 8: Decent Work and Economic Growth and 38% are going to SDG 7: Affordable and Clean Energy.

Why Are We Shifting Towards Green?

Shifting towards a green economy brings many benefits to different countries, as it is the path towards a more flexible and sustainable future in Egypt, and all other states in the region. This also creates an environmentally friendly, and a more sustainable and less polluted region. It also pushes the economy towards a flexibility that can bear external shocks and adapt, thus becoming resilient. 

The government’s strategy in shifting towards a green economy also attracts investors from the government and private sector to create job opportunities and have an optimal utilization of resources. In that sense, Egypt seeks to utilize all efforts in accelerating the transition to a green economy.

The IFC estimates that fulfilling climate pledges and transforming the green economy in Egypt, Jordan and Morocco requires smart investments worth $265 billion until 2030, noting that there are more opportunities available in the three countries that can attract investments worth billions of dollars in green infrastructure and transportation, such as electric cars, renewable energy, and waste recycling. 

As published in the annual report titled “International Partnerships for Sustainable Development: Writing the Future in a Changing Global Dynamic”, the Ministry of International Cooperation secured $9.8 billion in development financing; $6.7 billion secured for financing sovereign projects and $3.191 billion in support of the private sector. 

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