Ahead of COP27: Financing solutions on climate change

Mahmoud Bakr , Wednesday 10 Aug 2022

Egypt is seeking financial support for environmentally friendly projects and climate change mitigation and adaptation efforts in the run-up to the COP27 Conference in Sharm El-Sheikh.

Financing solutions on climate change
Financing solutions on climate change


The EU has made four million euros available to Egypt under a cooperation agreement that is part of coordination efforts between the Egyptian Ministry of Environment and the EU to help protect the environment and support Egyptian industry.

The agreement, signed by Yasmine Fouad, the minister of the environment, is part of ongoing preparations to host the 27th session of the UN Conference of the Parties (COP27) Climate Change Conference in the Red Sea resort city of Sharm El-Sheikh in November.

The grant will fund a portion of the third phase of the 145-million-euro Industrial Pollution Control Programme (EPAP) implemented in partnership with the EU, the European Investment Bank, the French Development Agency, and the German Construction Bank, Fouad said.

The EPAP, one of the Ministry of Environment’s largest initiatives, aims to help local industry improve its performance and comply with environmental laws and regulations. It also aims to help companies reduce their consumption of energy and resources in a way that supports sustainable development.

The companies the EPAP supports receive technical and financial help through monetary packages, including soft loans and grants, to encourage them to implement environmentally friendly projects that help to reduce pollution, Fouad said.

Small and medium-size enterprises (SMEs) enrolled in the programme receive grants of up to 30 per cent of the total cost of projects, Fouad said, adding that the EPAP is currently preparing and implementing projects that are environmentally compliant and energy efficient to the tune of more than 200 million euros.

The EPAP is designed to offer financial incentives to companies to enable industry to transition to a green economy and reduce greenhouse-gas emissions. It provides innovative solutions to industry to enable it to make this transition.

All industrial facilities nationwide can benefit from the EPAP, Fouad said, adding that companies enrolled in the programme will receive help in reducing carbon emissions and greenhouse gases, accessing export markets, making financial returns, improving productivity, and enhancing their competitive edge.

Fouad, ministerial coordinator and envoy at COP27, took part in a session on boosting investment in adaptation and risk-reduction efforts at the African Regional Forum on Climate Initiatives to Finance Climate Action and the Sustainable Development Goals held in Addis Ababa, Ethiopia, as part of the preparations for COP27.

Fouad reviewed ways of financing adaptation projects in Egypt within the framework of the country’s National Adaptation Strategy that has been amended and linked to the National Climate Change Strategy 2050 and the updated National Specific Contributions Plan 2030, both of which were recently launched.

She said financing came in two forms, the first from government and allocated to projects such as coastal erosion, nature-based solutions, and the protection of the Delta. The second form of financing is in the form of grants to help implement pioneering experiments such as planting different crops in Upper Egypt.

Egypt is implementing a large programme funded by the Green Climate Fund on integrated coastal zone management in several governorates, testing how nature-based solutions can protect and sustain the quality of life for local communities in areas most vulnerable to the effects of climate change, Fouad said.

Like many other African countries, Egypt is making adaptation efforts, such as flexible infrastructure that can protect beaches and limit coastal erosion, and these require financial aid.

Fouad emphasised that protecting the environment should be at the heart of adaptation efforts and that there should be diversified sources of financing to face common challenges such as food security, the availability of water, and beach protection.

Adaptation projects are often not attractive for banks to finance, while the environmental challenges can be greater than the financial aid available, she noted.

The focus should be on protecting the environment to reduce risks and support communities that are able to survive the effects of climate change. This should be linked to “grants and loans for the environment”, Fouad said, creating a comprehensive plan for diversified sources of financing, including the participation of the private sector and partners in development.

The African Regional Forum was held from 2 to 4 August as part of a series of regional forums prior to the COP27 Conference to bring together policy-makers, the private sector, and other stakeholders to work towards raising capital for emerging markets and developing economies, especially for projects that are regional priorities.

It also aimed to identify effective mechanisms for mobilising private financing for adaptation efforts in the face of climate change.

Emad Al-Din Adly, coordinator of the Arab Network for the Environment and Development, said the COP27 Conference in Sharm El-Sheikh was an opportunity for African countries to convey the message that developing and poorer countries will face the consequences of climate change despite the fact that they only contribute four per cent of harmful emissions.

He said that Egypt would focus on procuring the needed financial support for the African and developing countries to face up to the repercussions of climate change, including by adaptation efforts and efforts to achieve zero-carbon emissions.

COP27 will see negotiations on issues that directly affect the developing nations, and there will be efforts to turn the promises made at the previous Glasgow COP26 Conference into action on the ground, Adly said.  

It will work towards empowering the developing countries with urgent financial and technical support to boost their ability to adapt to climate change in a sustainable manner and will stress the need to implement the 2015 Paris Agreement on Climate Change, he added.

Figures presented by 13 Arab countries under the UN Framework Convention on Climate Change in 2020 say that they will need between $436 and $478 billion by 2030 to mitigate the repercussions of climate change, Adly said.

But only between $5.1 and $7.4 billion are channelled towards climate change mitigation and adaptation efforts in the Arab region on an annual basis, including international aid of between $3.6 and $4.9 billion that is largely concentrated in renewable energy investments, innovative partnerships, and financing arrangements that allow the use of public and private resources to help the Arab countries meet their commitments under the 2015 Paris Agreement and achieve the UN 2030 Sustainable Development Goals (SDGs), Adly said.

He said that the Arab region, one of the most water-scarce areas in the world, seeks to achieve benefits from adaptation and mitigation efforts, adding that the international finance allocated to mitigation is 3.5 times higher than the funding allocated to adaptation in the region.

*A version of this article appears in print in the 11 August, 2022 edition of Al-Ahram Weekly.

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