Given that the world just witnessed its hottest summer on record and projections next year will be even hotter, efforts to decarbonize economies must be immediately effective.
That comes as many countries, including Egypt, face economic pressures. “Despite the economic challenges, the government remains committed to work to protect the environment,” Minister of Environment Yasmine Fouad told state-owned Ahram English in June,
Her ministry’s work includes initiatives to promote eco-friendly (green) projects, attract private sector investment, and support zero-emission infrastructure and projects. The ministry also is raising public and civil servants’ awareness of the need to decarbonize the economy. Financing that transition likely will fall to other ministries and private sector banks.
National strategy
In 2020, the government launched its National Strategy for Climate Change (NSCC) 2050. It comprises four dimensions: managing climate change’s adverse effects; ensuring the use of natural resources is sustainable; preserving biodiversity and sustainability of ecosystems; and waste management. “Each of those pillars has a group of targets and enablers to achieve them, plus metrics to monitor progress,” Minister of Planning and Economic Development Hala el-Said told the State Information Service in October,
The government directed EGP 410 billion ($13.3 billion) to climate change and adaptation projects in the fiscal year 2022/2023. According to el-Said, 78% of that money went to fix damages caused by extreme weather events, with the rest going to climate adaptation.
El-Said said the near-term target is to increase green investments by 40% this fiscal year, which ends in July 2024, and 50% in fiscal year 2024/2025.
Ministry initiatives
Since 2014, the Ministry of Environment has launched several initiatives to raise public awareness about adopting eco-friendly behavior and protecting the environment.
The first was in 2015, called the Egyptian Pollution Abatement Program (EBAP), in cooperation with Agence Française de Développement and the German government’s development and investment bank KfW. The program supports manufacturers that want to decarbonize their operations by offering technical assistance; low-interest, long-term loans; and a grant equivalent to 10% to 20% of project value.
The government has executed EBAP’s first three phases, costing EUR 300 million. In late September, Fouad said the next step is to implement the EUR 250 million phase four of the EBAP project from 2024 until 2029.
In April 2021, the Ministry of Environment launched the E-Tadweer initiative to raise awareness and help companies and individuals recycle electronic devices, repurposing reusable materials to manufacture new products.
E-Tadweer has a digital platform and smartphone app to help companies and individuals submit waste collection. The initiative has partnered with Vodafone Egypt, 2B, RAYA and Burger King in Egypt to collect unwanted electronic devices.
In August 2021, the Ministry of Environment announced the “Prepare for Green,” the “first environmental initiative in Egypt,” said Fouad at the time. “Its focus is on launching a campaign that promotes forestation, recycling, rationing food and energy consumption, limiting plastic use, preserving aquatic life, reducing air pollution, and protecting natural reserves.”
In July 2022, the ministry launched the “Return Nature to its Natural State” initiative under the “Prepare for Green” program to raise public awareness of climate change and its consequences ahead of the U.N.’s 27th Conference of the Parties (COP27) in November 2022.
Those efforts allowed the ministry to implement 179 projects that protect natural resources, such as air and water. Others relate to sustainably managing natural reserves and waste.
Waste to energy
In 2013 and 2014, the Environment Ministry invested between $340 to $400 million in converting waste to energy, “encouraging the private to invest in this new opportunity,” noted a ministry report in September.
Fouad said the government invested and started promoting waste-to-energy projects in 2021, capitalizing on Egypt’s annual 4.5 million and 5 million tons of waste that can be converted to energy. The latest was a $120 million project announced in September in cooperation with Renergy Group Partners and the Ministry of Military Production to convert solid waste to electricity.
To promote investment, Fouad announced the Waste-to-Energy Program in February. It focuses on improving waste collection from major cities nationwide. It also supports the private sector in building waste-to-energy facilities to meet their needs or link to the national power grid.
Air quality
In September 2020, The Environment Ministry announced a $200 million project to improve air quality in Greater Cairo, home to nearly 25% of Egypt’s population. Fouad noted, “There was a great focus on projects that dispose of rice straw in an eco-friendly way.”
In the past decade, the ministry increased the number of air pollution monitoring stations from 87 in 2014 to 121 in 2023. Air pollution detection outposts, which relay readings to the nearest monitoring stations, rose from 161 to 469 in the same time frame.
The aim is to reduce particulates in the atmosphere by half by 2030. Helping achieve that goal is the presidential initiative to plant 100 million trees by 2030, announced in August 2022.
Water
Over the past 10 years, the Environment Ministry established a network of sensors to measure the quality of water sources across Egypt “in real-time,” Fouad said in July. The ministry also oversaw the construction of 25 water purification stations. Five of them are at Lake Mariout, and two at Lake Manzala.
Fouad also noted there are 12 field trips yearly to collect samples from the Red Sea, Mediterranean and Gulf of Suez to measure water quality. The ministry also commissioned a study in cooperation with the National Institute of Oceanography and Fisheries on maintaining ecological balance in rivers, lakes and seas.
In 2017, the ministry announced it was closely monitoring various state-owned facilities to prevent them from dumping their waste in the Nile River and Mediterranean Sea. The ministry also monitors 12 oil and gas excavation sites operated by nine petroleum companies near the Gulf of Suez to ensure they comply with national environmental standards.
Waste management
The Environment Ministry has invested in treating waste and recycling. As of 2023, there were 28 recycling facilities in Egypt handling steel and iron scrap, aluminum cans, glass, paper, wood and plastic.
Between 2014 and 2023, the government also established 17 fixed and 14 mobile processing facilities to sort, weigh and transport recyclable materials collected from trash dumps and collectors.
By 2030, the ministry plans to increase the number of recycling facilities to 56, comprising 50,000 treatment units and employing 150,000 collectors, sorters, traders and truck drivers. In June, Fouad told the media the goal is to recycle 80% of Cairo’s waste.
In September 2022, the government announced it was working on the MENA region’s first “fully integrated” recycling facility in 10th Ramadan City. It consists of a landfill for dumping non-recyclable waste and four plants to recycle municipal, construction, manufacturing and healthcare waste.
Green opportunities
Efforts to decarbonize Egypt’s economy resulted in significant national revenue increases over the past decade. Fouad said they raised revenues of the country’s Environment Protection Fund, created in 2007, by 1,600% to EGP 751 million.
Meanwhile, income from natural reserves jumped 2,242% in the past 10 years to reach EGP 280 million thanks to heavy investments in building eco-friendly facilities that serve visitors and simplify and expedite the licensing process for private companies to offer services and activities inside those reserves.
In the first quarter of 2023, Fouad announced the creation of a specialized unit that promotes green and climate investments. The Ministry also organized the first green and climate investment conference, where they announced and launched a digital platform highlighting over 46 investment opportunities in waste management, tourism, bioeconomy and other pollution-abating opportunities.
“Those are just the preliminary opportunities,” Fouad told the media during the announcement event. She also said those opportunities are for private-sector investors, including SMEs. “We will offer matchmaking and networking opportunities where they can create partnerships or benefit from the expertise of their peers.”
Green money
Specialized financing tools to fund government and private sector projects are to decarbonize Egypt’s economy. That would require working with the Ministry of Finance and local banks.
The Finance Ministry and Commercial International Bank (CIB) already have successful track records in issuing specialized instruments.
In September 2020, the government was the first in MENA to issue green bonds. The issue was for $500 million at an interest rate of 5.75% paid over five years. “The bond was more than seven times oversubscribed,” said a statement from the World Bank. That “led the government to increase its size to $750 million and lower the interest rate to 5.25% (below Egypt’s benchmark conventional bonds).”
In November 2021, CIB issued a $100 million, five-year, fixed-rate green bond to finance companies investing in “renewable energy, industrial energy efficiency, green buildings and resource efficiency,” the bank said. Almost immediately after the announcement, CIB said it had identified green investments worth $70 million in Egypt.
A year later, the government announced it had established Egypt’s first carbon credit company, opening the door to creating a carbon credit market where low polluters could sell credits to high polluters. It entices the former to invest in green projects to benefit from that additional revenue stream. Meanwhile, the polluter will see operational costs rise if they continue to purchase those credits.
Sarah Abdel-Kader, an environmental and sustainability engineer at the Institute of Global Health and Human Ecology, told Al-Monitor in November 2022, “This step is important in boosting Egypt’s efforts to reduce emissions without negatively affecting economic development.”
