Minister of International Cooperation, H.E. Dr. Rania A. Al-Mashat, held the first high-level coordination meeting to follow up on mobilizing innovative financing tools to finance the energy pillar within the Nexus of Water, Food and Energy platform (NWFE program), which aims to implement renewable energy projects with a capacity of 10GW, at the Ministry’s headquarters in the New Administrative Capital.
Participating in the event was 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 qualify 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 10 thermal power plants with a capacity 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 5 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 to be spent on 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.”
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 updating Egypt’s 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.
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, so the platform is able to 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 great 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. The necessary funds were also provided by development partners within the energy pillar to implement these projects, and agreements were signed. Its financial closure.
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.
Private Sector Participation
The Regional Director for the Southern and Eastern Mediterranean Region at the EBRD, Dr. Heike Harmgart, said, “We are very excited about holding the first coordination meeting led by the Ministry of International Cooperation and the Ministry of Electricity and Renewable Energy, which brings together all international financing institutions and parties concerned with the NFWE program. We stress on the Bank’s commitment to support Egypt in its transition towards a green economy. So far, we have mobilized financing worth $2 billion from the private sector in NWFE program projects, in addition to grants and concessional development financing.”
Harmgart noted the importance of the NWFE program beyond Egypt, and how it extends to the international community as an effective model that must be replicated to enhance climate and development efforts.
Presenting Achievements in the International Community
The Head of the Middle East Department at the German Federal Ministry for Economic Cooperation and Development, Mr. Mario Sander, said, “It was a very important and fruitful meeting” regarding joint coordination on the energy pillar within the NWFE program platform.”
He continued: “We greatly appreciate the role played by Al-Mashat and Shaker in leading efforts to achieve progress in energy projects. There has been great development since COP27, and the projects are compatible with the SDGs. The joint coordination between all partners has been very constructive and valuable for us."
He also pointed out that by reaching the current stage, “We have a common understanding of what we have accomplished and our direction during the next stage. We have all agreed that the progress achieved in the NWFE program since COP27 must indeed be shared with the international community at COP28.”
An International Commitment to Support the Program’s Projects
The Director of Climate Strategies at the EBRD, Mr. Harry Boyd, thanked the Ministry of International Cooperation and the Ministry of Electricity and Renewable Energy for the efforts made, saying, “Over the course of a year, we have made significant progress in implementing our commitments on the energy pillar of the NWFE program, which is a unique model, not only in terms of country ownership but also the participation of various development partners. The program is a very important platform for stimulating the global climate agenda and multilateral development bank reforms, and it also goes beyond its importance for Egypt and becomes an important and effective model for other countries. Its reference in the G20 statement is the best evidence of this.”
Most Notable Developments
During the meeting, the working team of the EBRD, the main development partner in the energy pillar within the NWFE program, presented the most prominent results of efforts to mobilize innovative financing tools and solutions and coordination with relevant parties to promote a just transition to renewable energy over the course of a year, based on agreements and letters of intent. Such letters were signed at COP27, during which investment needs were identified through technical assistance and institutional support, enhancing public investments to develop the electricity network and storage solutions, and mobilizing investments for electricity transmission.
The efforts made also contributed to strengthening technical assistance to prepare a decommissioning plan for 12 thermal energy plants, to be carried out in accordance with international standards, and to serve as a strategic document to determine the goals, milestones, timetable, and strategies for safe and effective decommissioning. This is in addition to the EBRD launching a study to determine the scope of the Just Transition Plan to identify training and reskilling needs and ensure an effective and fair transition plan for affected workers. It is important to note that further follow-up tasks for a just transition will be developed.
The EBRD also contributed to providing technical assistance to the Egyptian Electric Utility and Consumer Protection Regulatory Agency (EgyptERA) to develop regulatory rules for developing production and sale by the private sector of renewable energy projects in a “private-to-private sector” system, and developing green supply chains, in a way that enhances the ability to attract foreign direct investments and develop supply chains that is diversified and flexible in the fields of renewable energy with local participation to promote economic growth and job creation.
Mobilizing the Private Sector
Starting in 2023, the EBRD contributed to mobilizing funds of about $2 billion to finance the private sector in NWFE projects, in addition to grants and concessional development financing, including investments in wind and solar energy in the Gulf of Suez and projects that support the strengthening and modernization of the transmission and distribution of the network to accommodate renewable energy sources and draw down existing thermal capacities.
The Glasgow Financial Alliance for Net Zero (GFANZ) is also supporting the NWFE program in cooperation with the EBRD and other partners to enhance investment mobilization efforts.
French Development Agency
For her part, AFD’s Clémence Vidal de la Blache stressed the commitment of the Agency to support the implementation of the NWFE program, and provide €100 million of blended financing stimulating the private sector, in addition to a €10 million grant from EU partners, with the aim of supporting the energy transition in Egypt. She also stressed the agency’s keenness to participate in enhancing the participation of the private sector and moving forward towards implementing the projects included in the program and demonstrating the progress achieved during COP28.
European Union
The EU representative congratulated the Egyptian government and development partners on those efforts, stressing the European Union’s support for that vision and the efforts made through the NWFE program, saying, “The senior management at the European Union’s headquarters knows exactly what NWFE is, so we congratulate you on this achievement that must be achieved and replicated in other countries.”
She pointed to the EU’s commitment to supporting the NWFE program platform, based on the memorandum of understanding signed at COP27, with a value of €35 million to implement the energy pillar. H.E. also expressed the EU’s interest in supporting the implementation of the national strategy for green hydrogen, in light of the paramount importance of energy to the European Union.
European Investment Bank
The representative of the EIB, Kristina Kanapinskaite, said, “We are pleased to see this progress in the energy pillar of the NWFE program, and we stand strong to support the green transformation in Egypt by mobilizing financing worth €1.3 billion, as we announced at COP27, including $300 million in concessional development financing for the government, and €1 billion for the private sector to enhance its contribution to the transition to renewable energy. We are also working to support the green hydrogen strategy and support Egypt’s efforts to connect in the field of energy with Greece, Italy and Jordan, and we want to expand the scope of these solutions.”
Rania Al-Mashat
Rania Al-Mashat
Rania Al-Mashat
Rania Al-Mashat
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