IFC commits $605m to boost Egypt’s green economy

The International Finance Corporation (IFC) has invested $605 million in three major projects in Egypt, targeting climate finance, sustainable tourism, and support for small and medium-sized enterprises (SMEs).

According to Egypt Today, the first project involves a $300 million investment in sustainability bonds by the Arab African International Bank (AAIB). This is Egypt’s first such issuance and the largest by a private bank in Africa.

Co-financed by the European Bank for Reconstruction and Development (EBRD) and British International Investment (BII), these bonds will fund green projects like energy efficiency and renewable energy, while also supporting social initiatives such as financing micro and SMEs.

🌱Last night marked a turning point for green finance in Egypt: the signing of the country’s first sustainability bond by AAIB at the GEM. Backed by $500M from @IFC_org, @EBRD, and @BritishIntInv , this initiative paves the way for a greener and more inclusive future pic.twitter.com/XcWX7jNmRE

— Gareth Bayley, British Amb to Egypt 🇬🇧🇪🇬 (@GarethBayleyUK) November 25, 2024

The second initiative sees $155 million allocated to Orascom Development Egypt to promote sustainable tourism at its El Gouna hotels on the Red Sea. The funding will improve energy and water efficiency, with aims to halve energy consumption from non-renewable sources and reduce water use by 20 per cent.

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Part of the funding will also restructure Orascom’s debt to enhance financial stability. Omar El Hamamsy, Group CEO of Orascom Development, noted, “This partnership reflects our commitment as a global developer in contributing to a healthier planet, by creating vibrant destinations that harmonize with nature and boost Egypt’s economic growth.”

The third project consists of a $150 million investment in the Commercial International Bank (CIB) to strengthen its financial position and expand lending to micro and SME businesses, particularly those led by women.

“Egypt’s tourism industry is a major contributor to employment, foreign exchange earnings, and tax revenues. Our partnership with Orascom Development Egypt is a testament to our shared commitment to supporting a strong and more sustainable tourism sector in Egypt,” explained Sérgio Pimenta, IFC’s Vice President for Africa.

Egypt’s Minister of Planning and Economic Development, Rania Al-Mashat also highlighted the initiatives’ alignment with national goals for inclusive and sustainable growth.

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