Why Europe is promoted Climate Investment in Egypt?

European Union countries are pumping millions of dollars to support green investment in Egypt because of Egypt's renewable energy sources and that it is expected to be a source of green energy production in the region.

After the European Union countries announced that they are helping Egypt with 550 mn to reduce carbon, some have questioned why these countries invest in Egypt.

Why Europe is investing here: “Egypt has world-class renewable energy resources and is close to markets in Europe and Asia, giving it the potential to transform its own energy sector and become a global hub for green fuels and products,” EBRD said.

• CIF HAS USD 350 mn FOR EGYPT, KENYA, OTHERS

according to a statement of the Climate Investment Funds (CIF), Egypt is among several countries that will receive finance from USD 350 mn The CIF, which bills itself as among the world’s leading multilateral funds for climate action in emerging markets, said its CIF Nature, People and Climate investment platform will “finance nature-based solutions to the climate crisis” in countries including Egypt, Kenya and Fiji.

• Promote sustainable agriculture

  Italy, the UK and Sweden have provided more than USD 350 mn to the CIF’s Nature, People and Climate platform, which in Egypt will deploy the funding to “promote sustainable agriculture along the Nile River.

• Multi-donor trust 

  The USD 8 bn CIF, which includes sub-funds on clean tech, forest, scaling up renewable energy, and climate resilience, is a “multi-donor trust” and since 2008 has been "the only multilateral climate fund to work exclusively with multilateral development banks as implementing agencies."

  Egypt and others are expected to start with preparing investment plans against accessible financing, with implementation expected to begin as early as 2023.

• Lending to green projects to USD 185 mn 

The EBRD signed over an agreement with QNB Al Ahli to extend a USD 20 mn loan for onlending to MSMEs led or owned by folks 35 years or younger, it said in a statement. The EBRD and EU also signed a separate agreement with QNB Al Ahli under the lender’s Green Economy Financing Facility (GEFF) to provide EBRD funding to “private sub-borrowers, including companies and MSMEs, for green investments, such as renewable energy and energy efficiency projects.” The statement does not clarify how much fresh funding it will provide under the GEFF, but noted that the new financing will bring the total amount the EBRD has provided to QNB Al Ahli for on-lending to green projects to USD 185 mn.