INTERVIEW: IFC supports Egypt’s private sector, climate action plan, says VP for Africa

Doaa A.Moneim , Thursday 14 Dec 2023

The International Finance Corporation (IFC), one of the financial arms of the World Bank Group, was appointed in June as a strategic advisor for the Egyptian government’s Initial Public Offering (IPO) to provide advisory services for Egypt's privatisation programme.

 S rgio Pimenta
IFC s Vice President for Africa S rgio Pimenta. From the International Finance Corporation

At the UN Climate Conference COP28 in the UAE, Ahram Online interviewed Sérgio Pimenta, IFC vice president for Africa. Pimenta talked about the updates on the IFC-Egypt partnership, the IFC’s support for Egypt amid the ongoing economic challenges, as well as the corporation’s efforts to boost Egypt’s climate action strategy.

Ahram Online: What is the latest in the World Bank’s Egypt strategy, and the role the IFC plays in this respect?

Sérgio Pimenta: The World Bank Group launched the Country Partnership Framework (CPF) for Egypt for FY 2023-2027 in May this year, laying out its strategy for the country focused on three pillars: more and better private sector jobs, enhanced human capital outcomes, and improved resilience to shocks. Good governance and citizen engagement, as well as gender, are integrated across all pillars.

The IFC will contribute to the strategy — and of course to Egypt’s development — through financing private sector projects as well as through our advisory work. The IFC forecasts it will provide an estimated $2 billion to private sector projects between FY 2023 and FY 2027. These investments will be focused on important sectors such as access to finance, fintech, climate finance, manufacturing, infrastructure, logistics, renewable energy, healthcare, and gender inclusion.

Since the launch of the CPF in May, the IFC has already announced several projects and partnerships to support private sector development in Egypt. A few examples are:

In June, the IFC was appointed as strategic advisor for the Egypt’s Asset Monetization Programme, which is harnessing private capital and know-how to manage state-owned assets. We also signed an agreement with the Egypt’s Housing and Building Research Centre to enhance the green building ecosystem in the country, helping accelerate the transition to a green economy.

In September, the IFC partnered with Egypt’s Kandil Steel, one of the largest flat steel downstream re-rollers in the Middle East and Africa. The IFC’s $25 million loan will support the company’s operational and financial resilience, job creation, and its strategy to cut carbon emissions.

Also in September, the IFC partnered with Banque du Caire to develop a climate finance strategy that will help protect the bank from climate risks, increase its investments in green activities, and support the decarbonization of Egypt’s economy. And in July, we built on our long-standing partnership with the CIB on climate with an additional $250 million loan to further fund green projects.

And, just this week, we announced a new partnership with Al Baraka Bank Egypt to support micro, small, and medium enterprises (MSMEs) in Egypt through a $50 million loan – one quarter of which will be directed to businesses owned by women. We also extended our partnership with Banque Misr in October with a $234 million loan, also for MSMEs, with half of the loan directed to women-owned enterprises.

Beyond these, we have a strong pipeline of projects that will further deliver on the CPF and support Egypt’s development priorities.


AO: How is the IFC supporting Egypt’s efforts to combat climate change?

SP: The IFC is working to accelerate an inclusive transition to low-carbon and resilient economic growth in developing countries by mobilizing private capital to the most challenging locations. The IFC uses a wide range of investment and advisory instruments to create investable projects, de-risk opportunities, and mobilize private and institutional capital at scale.

As a member of the World Bank Group, the IFC focuses its efforts on key sectors that together generate more than 90 percent of global greenhouse-gas emissions, and that also face significant adaptation challenges: energy; agriculture, food, water, and land; cities; transport; and manufacturing. The IFC also seeks to green the financial systems that support them.

In FY 2023, the IFC globally financed and mobilized a record $14.4 billion in climate-related projects – nearly twice as much as the previous year’s $7.8 billion – and $2.7 billion of this global commitment was focused on Africa. Since 2016, the IFC has invested and mobilized nearly $2 billion in climate investments in Egypt.

A few key projects in Egypt from this past year include:

Energy transition: In November 2022, the IFC, AMEA Power, Sumitomo Corp together with JBIC, JICA, FMO and private sector commercial banks insured by NEXI provided a $1 billion finance package (including debt and equity) to build and operate twin solar and wind power plants (Abydos and Amunet) with a combined capacity of more than 1 GW that will deliver the lowest price of electricity anywhere in Africa that will power one million homes.

Climate finance: In addition to the aforementioned project with Banque du Caire to develop their climate finance strategy, we also partnered with the CIB to develop and implement a robust climate risk management framework —to ensure the bank's stability, regulatory compliance, and ultimately address the financing needs of its clients.

Decarbonization: Beyond our project with Kandil Steel, we’ve partnered with Egypt to boost the supply of safe drinking water in Egypt through desalination plants to be delivered through public-private partnerships – using clean energy to power the plants.

Green buildings: With support from our longstanding development partners at the Swiss Secretariat for Economic Affairs, the IFC partnered with the Housing and Building Research Centre, the green building arm of the Ministry of Housing, Utilities, and Urban Communities, to enhance the ecosystem of green buildings in Egypt, through policy reform initiatives, capacity building of public officials, raising awareness among public and private sectors and of course providing green finance. And, just last week, the Grand Egyptian Museum successfully achieved the IFC’s EDGE Certification, a global green building certification system focused on making buildings more resource-efficient.


AO: What are the climate projects the IFC will finance in Egypt in FY 2023/2024?

SP: The IFC’s strategy in Egypt aligns with the country’s national strategy to increase private sector participation in the economy, localize industries, and expand local production. In FY 2024, the IFC is focused on supporting Egypt’s private sector in areas including renewable energy, logistics, manufacturing, health, water, green buildings, digitalization, and financial inclusion.

On renewable energy, we are keen to build on the success of Benban, where we brought together key development partners to deliver Egypt’s largest solar park, as well as our recent $1 billion financial package for the Abydos and Amunet solar and wind projects.

Healthcare is another area in Egypt where the IFC sees tremendous opportunity for private sector investment. Today, the private sector manages a growing number of clinics, polyclinics, and specialized hospitals in Egypt, which are expanding access to healthcare in the country. The IFC is supporting affordable, accessible private healthcare in Egypt through investments and advisory services. For example, the IFC invested $150 million in Humania Hospital to improve the quality of care, as well as $35 million in Integrated Diagnostics Holding, to help the company grow access to high quality, affordable healthcare and diagnostic services in Egypt and Africa.

The IFC also launched in November 2023 a Country Private Sector Diagnostic Deep Dive, with support from the Minister of International Cooperation and the Ministry of Health, focusing on the healthcare sector which assesses private sector investment opportunities in Egypt’s health system and reform recommendations to unlock them with a focus on healthcare and pharmaceutical sub-sectors with the greatest potential to respond to key healthcare challenges in Egypt. We look forward to operationalizing the reforms identified in the report.

We are also exploring opportunities in water to help Egypt address its supply challenges, including through seawater desalination plants. In March, the IFC, along with EBRD, signed a public-private partnership advisory mandate with the Sovereign Fund of Egypt to help the government structure and implement the first set of desalination projects through a competitive process.

Additionally, the IFC is committed to supporting green building practices and projects in Egypt. We do this through the IFC’s EDGE tool for hospitals, airports, and beyond. EDGE enables developers and builders to quickly identify the most cost-effective strategies to reduce energy use, water use and embodied carbon in materials to scale up resource-efficient buildings in a fast, easy, and affordable way.

We’re also expanding our footprint in digitalization and financial inclusion. For example, the IFC has invested in venture capital funds such as Disruptech and Flat6Labs to support Egypt's fintech sector and help expand access to financial services in the country. And, we provide advice to the financial sector to help commercial banks expand their financial inclusion to SMEs, with a focus on women-owned micro, small, and medium-sized enterprises. For example, the IFC’s Banking on Women initiative, with support from the Swiss Secretariat for Economic Affairs, has helped Banque Misr, one of Egypt’s largest banks, provide financial services to 55,000 women-owned SMEs in the first year of the partnership.


AO: With Egypt racing against time to fulfil its commitments under the IMF loan deal, what is the latest regarding the IFC’s collaboration with Egypt’s IPO programme? And, what’s next?

SP: The IFC was appointed the strategic advisor for the government’s Asset Monetization Programme in June 2023. We are providing the government with advisory support to develop a strategy and implementation plan, and ultimately support execution of selected approved transactions, including through helping to structure and prepare assets for sale through, among other steps, improving the corporate governance of these entities.

Things are moving along as planned. The IFC stands ready to support the government in the implementation of the strategy and advise on the priority projects that meet the government’s objectives.

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