Funding was led by the European Bank for Reconstruction and Development's (EBRD), which financed a total of $527 million to Egypt’s private sector in 2021
Egypt secured $4.8 billion in development financing for the private sector in 2020 and 2021 through multilateral partnerships with International Financial Institutions (IFIs), explained the Ministry of International Cooperation’s (MoIC) 2021 Annual Report.
The “Engaging For Impact Towards Our Common Future: International Partnerships for Sustainable Development” noted that $3.2 billion was received in 2020 and $1.5 billion was secured in 2021 through direct financing and credit lines to commercial banks for the financing of SMEs.
Funding was led by the European Bank for Reconstruction and Development's (EBRD), which financed a total of $527 million to Egypt’s private sector in 2021, followed by the UK’s CDC which provided around $420 million, and $248 million from the International Finance Cooperation (IFC).
The total development financing included fund from Egypt’s first green bonds issuance, and EBRD’s financing to the country’s renewable energy flagship project, the Benban Solar Power complex.
MoIC’s annual report notes that 11 IFIs provided development financing; including $527 million from the EBRD; of which $80 million was allocated to Reefy, a micro financing enterprise services company. This comes within the framework of the Women in Business program that aims to support Micro, Small and Medium-sized Enterprises (MSMEs) that are led by women, a statement explained.
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The EBRD also signed development financing agreement with ACWA Power worth $144 million to establish Egypt’s largest private solar plant, Kom Ombo, which will add 200 MW of energy capacity, increasing the share of renewable energy in Egypt’s energy mix and further promoting private-sector participation in the Egyptian power sector.
Additionally, EBRD, the European Union, and the Green Climate Fund are working on enhancing green financing and developing the private sector’s value chains through 2 programs that amount to EUR 220 million, to help provide development financing loans for green investments in energy, water, and sustainable resource management solutions.
In 2021, the United Kingdom’s CDC has provided development financing agreements worth $420, and the International Finance Corporation (IFC) has provided $248 million, of which the first green bonds in Egypt were issued for $100 million by the Commercial International Bank (CIB).
The private sector plays a major role in achieving development, especially in light of the challenges countries face due to climate change, the statement explained while citing a report issued by the World Bank Group (WBG) and the International Renewable Energy Agency (IRENA) last June.
The report, on climate finance in developing and emerging economies, indicated that 70% of investments in developing countries’ clean energy should be carried out by the private sector.
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Pushing forward the private sector’s engagement in development is one of the Ministry’s strategic goals, through green financing, and through the commitment to the Environment, Social, and Governance principles (ESG), which aligns with Egypt’s Vision 2030 and the United Nations SDGs,’ the MoIC statement stated.
Egypt secured development financing for both private and public sectors worth $10.2 billion in 2021, including $8.75 billion directed to public sector development and $1.57 billion directed to private sector development. This also includes development financing grants worth $476 million, representing 5% of 2021’s total secured development financing.
