Germany supports Egypt’s transition to a green economy by offering concessional loans at just one-tenth of current market rates. In an interview with Daily News Egypt, German Ambassador to Cairo, Jürgen Schulz, revealed that Germany’s financial assistance is focused on helping Egypt meet its 2030 Agenda for Sustainable Development. As part of these efforts, Germany provides low-interest loans designed to support Egypt’s transition to renewable energy, modernize its electricity grids, and expand its green hydrogen capabilities.
Concessional Loans to Support Energy Infrastructure
Schulz emphasized that the concessional loans—offered at a rate significantly lower than current market terms—are essential for Egypt to meet its ambitious green energy goals. These include increasing its share of renewable energy to 42% of total energy consumption by 2035, with a key focus on green hydrogen production.
“These concessional loans enable Egypt to make necessary infrastructure investments without the burden of high-interest debt,” Schulz said. “They are a key component in modernizing Egypt’s energy infrastructure, which will allow the private sector to produce and sell green energy more effectively.”
Encouraging Private Sector Participation
Schulz noted that improving Egypt’s electricity infrastructure is crucial for attracting private investment in renewable energy projects. “The modernization of the electricity grid will create a more attractive environment for businesses to invest in green energy,” Schulz explained. “The concessional loans reduce risks for investors and create opportunities for long-term growth in renewable energy production.”
Debt Swap Program and Additional Financial Support
In addition to concessional loans, Germany is continuing its innovative debt swap program with Egypt, which allows the country to convert debt into investments for climate-friendly projects. Schulz confirmed that this debt swap initiative will remain a key tool for financing climate action and green energy projects in Egypt.
Under this arrangement, Egypt is able to use funds earmarked for debt repayment to finance projects related to climate change mitigation, renewable energy, and sustainable development.
Bilateral Trade and Economic Cooperation
Schulz also highlighted the growing economic relationship between Germany and Egypt. In 2023, bilateral trade between the two countries reached €6.7 billion, reflecting the deepening ties in sectors beyond energy, including manufacturing and infrastructure.
Germany’s financial support is also helping Egyptian companies boost imports and exports, further strengthening the bilateral economic relationship.
Looking Ahead: More Investments and Future Collaborations
The German government remains committed to supporting Egypt’s green energy transformation in the coming years. Schulz confirmed that Germany will continue offering concessional loans and exploring additional projects focused on renewable energy and sustainable infrastructure. A large delegation from the German state of Bavaria will visit Egypt in January 2025 to explore investment opportunities, particularly in green hydrogen.
“Germany’s strategic interest in Egypt’s green energy sector is growing,” Schulz said. “We are excited to continue supporting Egypt’s efforts to become a regional leader in green energy.”
Additionally, a second delegation from the German state of Saxony will visit Egypt in April 2025 to focus on investments in energy and infrastructure.
A Milestone in Green Energy Cooperation
In July 2024, the first financing agreement for a green hydrogen project was signed between the two countries. This agreement, which involves German financial institutions including the German Development Bank (KfW), is part of a broader strategy to strengthen economic and environmental cooperation.
“This financing agreement marks the beginning of a larger effort to make Egypt a leader in the green hydrogen market,” said Schulz. “It is a key moment in our collaboration and a sign of the growing partnership between Germany and Egypt.”
Tourism and Investment Opportunities
Schulz also noted that the tourism sector continues to be an important aspect of the Egypt-Germany relationship, with 1.5 million German tourists visiting Egypt in 2024. As one of the country’s top tourism markets, Germany continues to be a major source of visitors drawn to Egypt’s historic sites and natural beauty.
