The debt swap will assist the government’s efforts in meeting its goals of generating 42% of Egypt’s electricity from renewable sources by 2030 by financing investments and projects accelerating the transition
Ministries of International Cooperation, Electricity and Renewable Energy, and the Central Bank of Egypt signed a debt swap agreement with the German Development Bank (KfW), on behalf of the Federal Ministry of Economic Cooperation and Development (BMZ), on Sunday, to finance Egypt’s transition to green energy.
According to a statement by the German embassy in Cairo, the agreement exempts Egypt from repaying debts of €54 million to instead use this amount in financing the transition to green energy.
The debt swap will assist the government’s efforts in meeting its goals of generating 42% of Egypt’s electricity from renewable sources by 2030 by financing investments and projects accelerating the transition.
The statement mentioned the construction of two sub-stations and the connection of two wind farms (Amunet and Red Sea Wind Farm) with a capacity of 500 megawatts, which will be implemented in collaboration with the Egyptian Electricity Transmission Company.
“The purpose of the project is to develop a transmission network for integrating renewable energies into the electricity grid and enhancing its capacity,” it added.
Germany pledged to contribute significantly to Egypt’s Nexus on Water, Food, and Energy initiative (NWFE) during COP27 held in Sharm El-Sheikh in November 2022. Since the pledge, Germany has provided a total financing package of more than €250m – for the same purpose – including debt forgiveness, grants, and soft loans.
