The Minister of International Cooperation, H.E. Dr. Rania A. Al-Mashat, chaired the first high-level coordination meeting to discuss the mobilization of innovative financing tools for the energy pillar of the Nexus of Water, Food, and Energy platform (NWFE program).
The program aims to implement renewable energy projects with a total capacity of 10GW, and the meeting was held at the Ministry’s headquarters in the New Administrative Capital.
Participating in the event were the Minister of Electricity and Renewable Energy, H.E. Dr. Mohamed Shaker El-Markabi; the Regional Director for the Southern and Eastern Mediterranean Region at the European Bank for Reconstruction and Development (EBRD), Dr. Heike Harmgart; and the Head of the Middle East Department at the German Federal Ministry for Economic Cooperation and Development, Mr. Mario Sander. Representatives of the United States of America, the World Bank Group, the German Development Bank, the Agence Française de Développement (AFD), the European Investment Bank (EIB), the European Union (EU), the German Embassy, the United Kingdom Embassy, the Netherlands, in addition to the leadership of the Ministries of Electricity and International Cooperation, and relevant entities also participated in the event.
The meeting came in preparation for COP28, which is to be held in the United Arab Emirates, to review the efforts made in moving from pledges to implementation since the launch of the program and the signing of partnership agreements and letters of intent at COP27 in Sharm El-Sheikh.
Energy Pillar Goals
The energy pillar within the NWFE program aims to mobilize innovative financing solutions through grants, debt swaps, technical assistance to qualified projects, credit guarantees and risk reduction, private sector investments, and concessional development financing to implement renewable energy projects with a capacity of 10GW to replace ten thermal power plants with a total of 5GW. This enhances Egypt’s move towards renewable energy, implements its pledge to reach the percentage of renewable energy to 42% by 2030 instead of 2035, and implements the national strategy for sustainable and integrated energy. The targeted investments in the energy sector amount to about $10 billion to implement projects within five years.
The energy pillar enhances the achievement of the goals of the National Climate Change Strategy to reach sustainable economic growth and implement the Nationally Determined Contributions (NDCs) plan by reducing carbon dioxide emissions. It is also consistent with the SDGs related to clean energy, climate action, and the sustainability of local communities. The project aims to provide about $1.2 billion a year for fuel needed to operate thermal power plants.
Repeatable Model
“In her speech, Al-Mashat, said,”“Before COP27, we began joint work on preparing the NWFE program, as a comprehensive platform for climate and development efforts, both at the same time. Our partners, including the President of the EBRD, Dr. Odile Renaud Basso, contributed, through her commitment to refer to a platform globally to become one of the most important national platforms known among development partners and the international community, to become a model that can be replicated at the global level by countries that want to achieve their climate ambition.””In her speech, Al-Mashat said, “Before COP27, we began joint work on preparing the NWFE program as a comprehensive platform for climate and development efforts, both at the same time. Our partners, including the President of the EBRD, Dr. Odile Renaud Basso, contributed, through her commitment to refer to a platform globally to become one of the most important national platforms known among development partners and the international community, to become a model that can be replicated at the global level by countries that want to achieve their climate ambition.”
Al-Mashat thanked H.E. Dr. Shaker and development partners for their commitment throughout the year and joint coordination regarding putting projects into practice. H.E. also stressed that the NWFE program does not only provide soft development financing to the government but also provides financing opportunities for the private sector in the form of loans, development grants, and debt swaps.
“H.E. continued:”“During COP27, the joint political declaration was issued between Egypt, the United States, and Germany regarding support for the energy pillar within the NWFE program, which stipulated key points, including updatingEgypt’ss NDCs and earlying the date for increasing the percentage of renewable energy to 42% in 2030 instead of 2035.” H.E. pointed out that Egypt has already fulfilled this commitment amid global circumstances and economic challenges due to the surrounding conditions, and announced the update of these contributions last June.”H.E. continued: “During COP27, the joint political declaration was issued between Egypt, the United States, and Germany regarding support for the energy pillar within the NWFE program, which stipulated key points, including updating Egypt’s NDCs and early the date for increasing the percentage of renewable energy to 42% in 2030 instead of 2035.” H.E. pointed out that Egypt has already fulfilled this commitment amid global circumstances and economic challenges due to the surrounding conditions and announced the update of these contributions last June.
Moreover, H.E. noted that the political declaration included German pledges to implement new tranches of debt swaps for development directed to the energy pillar of the NWFE program, and a tranche worth €54 million had already been signed out of €104 million pledged by the German side, as a result of updating the NDCSs. This was to finance establishing a project to connect two wind farms with a capacity of 500MW each to the electricity transmission network to achieve the Government of Egypt’s goal of producing electricity from renewable energy sources by 42% by 2030.
In addition to these steps, Al-Mashat confirmed that the NWFE program not only supports Egypt’s transition to a green economy through renewable energy but also through green hydrogen. Hence, the platform can expand the scope of work to implement Egypt’s goals regarding transforming into a regional renewable energy center, stressing that these measures reflect Egypt’s strong commitment to the green transformation.
Al-Mashat stated that the NWFE program is a state-owned platform and is considered an important example and model that reflects the strong relationship between Egypt and its development partners, who began working with it in 2014 to promote the transition to renewable energy.
Saving 17 Million Tons of Emissions Annually
For his part, H.E. Dr. Shaker explained that the energy sector in Egypt is witnessing a qualitative shift from gas to renewable energy sources, wind resources, and solar energy on a large scale, in light of the distinguished geographical location to reach global markets and export green products. H.E. explained that in cooperation with development partners and through the energy pillar within the NWFE program, they are working to reduce greenhouse gas emissions by 17 million tons of carbon dioxide annually.
H.E. Dr. Shaker also added that the electricity sector has made significant progress in attracting renewable energy investments as part of a plan to attract the private sector to increase renewable energy capabilities by about 10GW, pointing out that the country was able to start implementing projects with a capacity of 3.7GW of wind and solar energy.
The signing of all agreements for renewable energy projects with a capacity of 3.7GW was between the Ministry of Electricity, United Energy, and private sector companies such as ACWA Power, Masdar, Al Nowais, Orascom, and others. Development partners within the energy pillar also provided the necessary funds to implement these projects, and agreements were signed.
H.E. also indicated that in coordination with the EBRD, technical support for green supply chains that stimulate foreign direct investments will be enhanced with local participation to enhance growth and create job opportunities. He pointed out that the energy pillar of the NWFE program includes stopping work on 5GW stations operating with thermal energy by the first quarter of 2024 alongside plants that work at a 1GW capacity.
Shaker described the country’s success in updating the NDCs in June 2023 to update the timeline for increasing renewable energy to 42% by 2030 instead of 2035 as an achievement, which is in line with the political declaration made at COP27.
Moreover, Shaker indicated that the National Green Hydrogen Strategy will work to benefit from Egypt’s competitive capabilities to achieve its ambitious plans in the hydrogen sector, which targets up to 5-8% of the global tradable market by 2040.
