Egypt, the United States of America and Germany came together in Sharm El Sheikh Friday to mark a milestone in Egypt’s green energy transition and efforts to address the global climate emergency, the European Bank for Reconstruction and Development (EBRD) said in a statement.
In the presence of US President Joe Biden and a consortium of international partners, including the European Commission, France, the Netherlands, Denmark and the United Kingdom, the three countries issued a declaration of support for the energy pillar of Egypt’s country-led platform for the Nexus on Water, Food and Energy (NWFE).
The European Bank for Reconstruction and Development (EBRD) is Egypt’s lead partner on the NWFE energy pillar.
The energy pillar has secured international political support from the United States of America and Germany, which pledged more than US$ 250 million in support for the NWFE energy pillar.
Alongside this, Egypt confirmed its aim to accelerate its deployment of renewable energy, delivering clean, affordable and reliable power for its citizens by bringing forward its 42 per cent renewable electricity target from 2035 to 2030.
“I’m pleased to announce today, alongside the European Union and Germany, a US$ 500 million package to finance and facilitate Egypt’s transition to clean energy,” Biden told the audience at COP27.
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.
“This deal shows again how a multi-partner approach and focused effort can quickly deliver higher ambition. We know Egypt wants to move faster to deploy renewables and accelerate the energy transition. But they need to know that donors and development partners are going to be there to help them through it.
“Egypt has now agreed to quadruple their deployment rate and reflect that in a revised NDC. The United States, with the Germans anchoring it, made the commitment that we’re going to help them with concessional financing to get the first 10 GWs done quickly and cost-effectively.
“I think this partnership is one way to overcome the impediments to faster action. And I hope others follow. I know we stand ready,” U.S. Special Presidential Envoy for Climate John Kerry said.
The NWFE-Energy Pillar is expected to unlock at least US$ 10 billion in private investment to install 10 GW of solar and wind energy by 2028. The initiative will also include the retirement of 5 GW of inefficient fossil-fuel capacity by 2025, leading to a substantial reduction in natural gas consumption and greenhouse gas emissions, estimated at around 17 million tonnes of CO2e per year.
In addition to mobilising support from the United States and Germany, the initiative is planning to deploy more than US$ 300 million in grant and concessional finance from the European Commission, France, the Netherlands, Denmark and the United Kingdom, as well as donors to the EBRD’s High Impact Partnership on Climate Action (Austria, Finland, the Netherlands, Spain, Switzerland, the Taiwan International Cooperation and Development Fund (ICDF) and the United Kingdom).
In addition to taking the lead role in supporting Egypt in implementing the NWFE energy pillar, the EBRD has committed US$ 1 billion of private renewable finance, US$ 300 million in sovereign finance and grants of US$ 3 million from its Shareholder Special Fund.
Speaking on a high-level panel to mark the NWFE energy pillar, EBRD President Odile Renaud-Basso said: “We are very proud to be Egypt’s partner in this innovative country-led platform, which blends government commitment, international support and private finance to accelerate a just energy transition.
“We believe this is a model of how climate finance can be scaled up in Egypt and elsewhere, and we look forward to working closely with the Egyptian government to support the delivery of these high ambitions.”
Egyptian Minister of International Cooperation Rania Al-Mashat said: “Egypt’s country platform for the NWFE was developed on the back of the announcement of the 2050 Country Climate Strategy and the Nationally Determined Contributions (NDCs).
“Leveraging Egypt’s partnerships with multiple stakeholders, the country has been leading efforts to mobilize finance, avail of technical assistance and catalyze private investment through innovative financing modalities, including blended finance, for NWFE projects.
“This provides opportunities for mobilizing climate finance and private investments to support Egypt’s green transition, reflecting the interlinkages and complementarity between climate action and development efforts.
“This is realized through the design, structuring and preparation of concrete and implementable climate action projects.”
Lord Goldsmith, Minister of State at the UK’s Foreign, Commonwealth and Development Office, said: “We are very proud to confirm the UK Prime Minister’s announcement of immediate support of £5.75m to develop investment projects for Egypt’s Nexus of Food, Water and Energy initiative.
“NWFE is a great example of how to put climate commitments into action and the UK will continue work with Egypt to mobilise additional climate finance for this important initiative.”
Egypt is a founding member of the EBRD. Since the start of its operations there in 2012, the Bank has invested more than €9.8 billion in 152 projects across the country.
The partnership agreement to implement the NWFE energy pillar was signed on 8 November 2022 between the Ministry of Electricity and Renewable Energy, the Ministry of Environment and the Ministry of International Cooperation and the EBRD-led group of development partners ‒ the United Kingdom, Agence Française de Développement, the European Investment Bank (EIB), the African Development Bank, the Asian Infrastructure Investment Bank, Denmark’s Investment Fund for Developing Countries (IFU) and the Netherlands’ Invest International.