The volume of international funding reflects the confidence of institutions around the world that investments of this type will find fertile ground in Cairo, as the country has reaped nearly 200 million euros from the financing mechanism of the economy. green of the European Bank. For reconstruction under the first phase of the program.
For her part, the CEO of the African Private Investment Association (AVCA), Abi Mustafa Madwakor, named Egypt to seize huge direct investments in the renewable energy sector and the green economy in general.
She added, in statements to “Sky News Arabia Economy”, that the success of hosting the COP 27 conference has drawn the world’s attention in terms of promising opportunities in Egypt in this particular sector.
The European Bank for Reconstruction and Development, in partnership with the European Investment Bank and the French Development Agency, aims to help small private sector companies invest in energy efficiency and green technology projects.
In addition to the provision of the United Nations Green Climate Fund, financing of 4 projects in Egypt, with a total value of 297 million dollars in various sectors.
In this regard, the Director of the United Nations Development Programme’s Fourth National Climate Change Reporting Project, Dr. Samir Tantawi, said that Egypt’s share of green finance has increased significantly over the past 3 years in compliance with international standards.
And he added, in statements to Sky News Arabia Economy, that major industrial countries should provide funding worth $100 billion a year. As agreed at the 2009 UN Climate Change Conference in Copenhagen, but it has not yet committed to doing so.
He says that the current economic crises threaten the sustainability of this type of financing, provided by the major industrialized countries in the coming periods. Given the need to cut expenses, due to the Russian-Ukrainian war.
Tantawy believes that climate change remains the greatest challenge facing future generations, as research studies indicate the need to work to quickly resolve the impacts of climate crises.
The Egyptian expert says that European countries are seeking to take advantage of promising opportunities in the renewable energy sector, which exist in particular in Egypt. Where the latter was able to achieve a breakthrough in the elimination of coal by a significant percentage, thanks to the energy mix.
Egypt has made great strides towards localizing renewable energy in recent years, the most important of which are:
It has launched several renewable energy projects, at the top of which is the Benban solar power plant, which includes 32 stations that can generate 1,650 megawatts. Earlier, the government granted a golden license to establish green hydrogen and green ammonia production plants, at an investment cost of $6 billion. This was followed by an agreement between Egypt’s Sovereign Wealth Fund, Norwegian company Scatec, Emirati ammonia company Fertiglobe and Orascom Construction early last month to establish and operate the ammonia production project. hydrogen in Ain Sukhna, with a production capacity of 100 megawatts.
electricity to Europe
In turn, the Egyptian financial analyst, Mustafa Shafie, said in statements to “Sky News Economy”, that green funds for Egypt are a factor helping to solve the country’s foreign currency supply crisis. .
He explains that the government is actively seeking to provide financing with long repayment terms, so as not to weigh on short-term foreign exchange resources.
He also pointed out that sustainable foreign exchange resources will be the only savior, especially since it bears the greatest burden to bridge the budget gap and Egypt is quick to pay its financial obligations.
And he continues: “Europe, after the outbreak of the Russian-Ukrainian war, began to look for alternatives to supply itself with energy of all kinds, and Egypt came in third place after Algeria. and Qatar, due to geographical factors and its proximity to the old continent.”
“And due to the same circumstances related to the war in Ukraine and the cut off of Russian gas supply from Europe, the countries of the European Union are also aiming to import electricity with long-term agreements. term from Egypt.”
Cairo is currently seeking to establish 4 projects to interconnect its power grids with Europe, the first with Greece and Cyprus via a single submarine cable under the EuroAfrica Interconnector project since 2018.
It is also studying two other projects to link Egypt and Greece, the first with a capacity of 3 gigawatts and another with a capacity of 2 gigawatts. Egypt and Italy are also discussing another project to a capacity of 3 gigawatts.
The past few days have seen several Egyptian-European agreements on new projects, the latest of which was the hosting of the Swedish Embassy in Cairo a few days ago for an event focusing on the energy link between Europe and Egypt, and witnessed the signing of the European Investment Bank agreement with Bank of Alexandria to provide $15 million.
The agreement aims to lend to green projects, on the condition that the European Bank obtains this money through the Green Economy Financing Program for Egypt (GEFF).
Participants at the event discussed how Europe can support financing Egypt’s green transition and how to export the renewable energy produced in the country to the old continent.
It’s not a substitute
Egypt cooperates closely with international institutions. This week, the Egyptian government and the United Nations also launched the Strategic Framework for Partnership for Sustainable Development 2023-2027 in Cairo.
The five objectives of the 4-year partnership framework include strengthening public services, improving women’s rights, building capacity to adapt to climate change and reducing the informal economy. But is international support enough for these areas to solve major economic crises?
In this regard, Egyptian economist Medhat Nafie points out that traditional financing methods to solve the dollar crisis in Egypt cannot be replaced by financing for green projects.
And he explains, in statements to Sky News Arabia Economy, that green bonds around the world, for example, still account for no more than 5% of total executions in the bond market.
He points out that major industrial countries could postpone their plans to reduce carbon emissions, with the continuation of the economic crises that the world economy is currently going through, such as high inflation rates and fears of entering recession.
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