European Bank for Reconstruction and Development (File Photo: Reuters)
The European Bank for Reconstruction and Development (EBRD), along with Agence Française de Développement (AFD), the European Investment Bank (EIB) and the European Union (EU), has launched a €140 million ($151.22 million) programme to promote green investments in Egypt, the EBRD announced.
In an emailed press statement Tuesday, the bank said that the launched programme, titled Green Economy Financing Facility (GEFF), will support "projects to boost energy efficiency and the development of renewable energy sources in the country at a time of rising energy prices."
In 2014, Egypt started a plan to introduce a number of fiscal reforms, including fuel subsidy cuts and the imposition of new taxes, to ease a growing budget deficit, currently estimated at 12.2 percent of GDP. As part of these reforms, the Egyptian pound was floated in November.
The new programme 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, aimed at promoting energy-efficient and renewable energy technology, raising awareness, reducing operating costs and improving competitiveness.
The EU is contributing a grant of €23.8 million. The National Bank of Kuwait (NBK) in Egypt and the Qatar National Bank (QNB) Al-Ahli in Egypt are the first banks to participate in the new facility.
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 another example waste heat is used to generate 25 per cent of the electricity needs of a large industrial company,” Lucet said.
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.
Egypt is a founding member of the EBRD and has been receiving funding since 2012.
The bank has invested €2.3 billion in 43 projects in the most populous Arab country, while the current portfolio of projects is about €1,928 million, according to the EBRD website.
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 such as the metro lines. The EBRD has also provided technical assistance support to more than 500 small and medium-sized local enterprises.
*The exchange rate of 1 Euro is equivalent to 1.08 US dollars, while the exange rate of 1 euro is equivalant to 19.65 Egyptian pounds.