Egypt seeks to attract investments in the green economy
The green economy in Egypt aims to attract new investments. Ahmad Abdel-Rahman explains how the government will achieve this.
The visit of the South Korean president to Egypt from January 19 to 21 this year strengthened political and economic relations between the two countries. Both agreed to the future expansion of joint projects to enhance the value of the green economy, particularly cars and environmentally friendly transportation.
This trend was highlighted in the speech of President Moon Jae, president of the Republic of South Korea. In this speech, Moon stressed the areas of cooperation between the two countries, which will be worked on in the future. He thanked businessmen for the success of the existing partnerships. and in working to strengthen economic relations between the two countries.
In seeking to transform Egypt into a "green" economy, and coinciding with the convening of the Climate Summit (COP27) in Sharm El-Sheikh city in November 2021, Egypt implemented one of the largest solar plants in the world - the Benban Solar Park in Aswan. It has also implemented dozens of other projects.
The green economy focuses on increasing resource efficiency, reducing carbon emissions, waste and pollution and preventing biodiversity loss and ecosystem degradation. These investments are also driven by a growing demand for green goods and services, and technological innovations. Public tax policies have also been altered to ensure that prices are an adequate reflection of environmental costs.
In this context, the Egyptian government aimed to increase the percentage of its investments in green projects by 15 per cent in 2020-2021. It also aims to increase the proportion of investments to 30 per cent for the year, 2021-2022, and to reach an investment of 50 per cent by 2024-2025.
Egypt has also been the first country in the Middle East and North Africa to issue sovereign green bonds in the global markets. The current green bond is valued at USD 750 million for five years. It is one of three green bonds issued in the Middle East and North Africa region in the past year.
Some 14 per cent of the total public investments for these projects was allocated to green investments in the 2020/2021 budget. The cost of implementing 691 green projects in the 2020/2021 fiscal year plan amounted to about EGP 447.3 billion. (USD 28.4 billion)
The total value of Egypt's portfolio of green projects amounted to USD 1.9 billion as of September 2020, 16 per cent of which are in renewable energy, 19 per cent in clean transportation, 26 per cent in water and sanitation, and 39 per cent in the field of pollution reduction.
Efforts to go green
The Ministry of Electricity plans to increase the share of renewable energy to 20 per cent of the energy consumed in Egypt by 2020, 12 per cent to be wind energy and eight per cent to be hydro and solar energy.
The Ministry of Investment in Egypt is also interested in the feasibility of generating electricity from solar energy, the economic exploitation of the Western Desert and the feasibility of intensive investment in it. It is also interested in developing the entire Egyptian Western Desert, whether in the possibility of investments in biofuel, or the implementation of a solar energy project to generate the electric power it needs.
The government is also seeking to correct the price structure of petroleum products and restructure the energy sector to ensure that the support it receives reaches its beneficiaries. The Ministry of Environment, in cooperation with the Ministry of Finance and Nasser Bank, implemented a project to replace the taxis in Greater Cairo. This project aims to reduce 264,000 tons of carbon dioxide emissions annually, as well as achieving the economic and social return on this project.
The government is also implementing an ambitious programme to convert government cars from gasoline to natural gas. This is in addition to banning the production and import of motorcycles and replacing them with those that generate less air pollution.
The government is working on implementing an indicative programme for the sustainability of transportation systems. The state supports mass transportation systems. Hence, the third line of the metro has been established and will be ready for operation in June 2022.
A draft law on the participation of the public and private sectors in infrastructure projects is also being prepared in order to attract more investments, including the energy sector. It is hoped that this will mitigate the effects of climate change.
Two programmes for controlling industrial pollution and protecting the environment are also being implemented by the private sector. The industrial public business sector is also implementing programmes, which includes 120 projects to reduce industrial pollution.
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