INTERVIEW: Egypt top destination for EBRD investment in region: Managing director

Maha Hassan, Thursday 29 Sep 2022

Heike Harmgart, the managing director of the southern and eastern Mediterranean (SEMED) at the European Bank for Reconstruction and Development (EBRD), said that Egypt is the largest recipient of EBRD’s investment in the region since day one.

Heike Harmgart
Managing Director of the Southern and Eastern Mediterranean (SEMED) at the European Bank for Reconstruction and Development (EBRD) Heike Harmgart


In an interview with Ahram Online, Harmgart added that Egypt is one of the top three countries, out of 38, receiving EBRD investments.

The EBRD’s volume of investments in Egypt – a founding member of the bank – stands at nearly one billion Euros annually.

The bank has invested about 9.8 billion Euros in the country across more than 152 projects since 2012, with the private sector receiving about 76 percent across sectors including financial and banking institutions, electricity, renewable energy, manufacturing and others.

In the energy sector, the bank aims to invest up to $1 billion in private renewable projects in order to generate an addition 10 GW of renewable energy in Egypt, while also decommissioning five GW of inefficient gas-fired power plants, Harmgart said.

Moreover, the EBRD also aims to invest up to $300 million in sovereign lending, including for projects to stabilise Egypt's grid, add battery storage, develop the local supply chain for renewables and reskill workers.

“Egypt is a renewable energy superpower that can contribute to this goal by integrating more solar and wind consumption. It also has a huge potential to become a green hydrogen hub,” Harmgart said, adding that the bank is also looking at supporting projects in water desalination.

Egypt’s vision is to become a global and regional hub for green hydrogen production, storage and export. In late August, the country signed seven memoranda of understanding (MoUs) to establish industrial complexes to produce green hydrogen in the Ain Sokhna Industrial Zone, which is located within the Suez Canal Economic Zone (SCZONE).

In mid-September, Egypt initiated cooperation with the global Maersk Group to establish an integrated national network to produce and distribute green energy and clean fuels for ships based on new and renewable energy sources.

In light of organising the 27th UN Climate Change Conference (COP27) in November, Egypt – through its Vision 2030 – aims to generate 20 percent of electricity in 2022 from renewable energy sources, with the goal of increasing this figure to 42 percent by 2035.

The country aims in the coming years to further reduce carbon emissions, promote the use of renewable energy sources and use alternative energy forms including green hydrogen as part of its National Climate Strategy 2050 announced by the government in May.

Harmgart highlighted the importance of energy cooperation between the EBRD and Egypt, saying “we are the leading institution of Egypt’s Nexus on Water, Food and Energy (NWFE) Programme” that was one of the key topics presented and discussed during the International Cooperation Forum held earlier in September.

In July, Egypt launched the NWFE programme within the framework of its National Climate Change Strategy 2050, with a view to attracting foreign investments to Egypt’s green transformation plan.

During his visit to Cairo in September, US Climate Envoy John Kerry lauded Egypt's NWFE programme, saying it is a model for best ever development programmes directed to face climate change effects.

COP27 cooperation

Harmgart said that EBRD President Odile Renaud-Basso will attend COP27 with a delegation from the EBRD and the Cairo team in support of the climate agenda and Egypt’s NWFE programme,

Moreover, Harmgart said the EBRD is working closely with the Ministry of Electricity and Renewable Energy and the Ministry of International Cooperation to sign a partnership agreement with development partners during COP27 to mobilise additional investments.

On Tuesday, the UNDP, the European Union, the Embassy of Denmark, the Embassy of Switzerland, and the African Climate Foundation (ACF) signed a $6.2 million agreement on a project to support Egypt’s presidency of the COP27.

There is a commitment of $100 billion from developed countries towards climate finance globally and this is needed to reach the COP27 goals including limiting the increase of temperature to 1.5 degrees globally, Harmgart said.

The EBRD has set itself an ambitious strategy to promote green investment, he said, adding that all the EBRD’s investments will be aligned with the 2015 Paris Agreement by the end of this year and green projects will account for at least 50 percent of the bank’s new investments by 2025. 

Other EBRD priorities

One of the bank’s other three priorities in Egypt, Harmgart said, is the inclusion of youth and women in the economy.

The EBRD worked on a big campaign with Chairman of the National Council for Women (NCW) Maya Morsy to support safety for men and women on public transport, he said.

The bank also has the Women in Business Programme with local banks in Egypt, which provide credit lines to female entrepreneurs, he said.

This programme is specifically focused on women-led small and medium-sized enterprises (SMEs), meaning businesses with fewer than 250 employees and less than 50 million Euros in annual turnover or with a balance sheet total of less than 43 million Euros. For a business to qualify for this programme, overall operational management responsibility for the company should be held by a woman, who may also partially or wholly own the business, according to the EBRD’s programme website.

Since 2014, Harmgart said, the bank has lent a total of $52.7 million under the programme through partnerships with QNB AA, Tanmeyah Microfinance, Reefy Microfinance and the Export Development Bank.

The programme was among the first of its kind in Egypt.

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