CBE flags confusion over green, climate finance as key challenge

Distinguishing between sustainability, green and climate finance remains a key challenge for the banking sector, as each involves different standards and funding requirements, Walid Ali, Sustainability General Manager at the Central Bank of Egypt (CBE), said.

Speaking at a session titled “How Can Sustainability Projects Become Bankable and Investment-Ready? — From Concept to Finance” during Egypt Sustainable Business Week, Ali said confusion over these concepts had been among the main challenges facing banks when they first began shifting toward sustainable finance.

Three distinct financing frameworks:

The CBE official explained that sustainable finance is the broadest framework, covering environmental and non-economic criteria, while green finance targets projects with environmental benefits, including pollution reduction, biodiversity conservation and more efficient resource use.

Climate finance, meanwhile, supports projects aimed at addressing global climate change by limiting global warming and reducing emissions.

He stressed that understanding the distinctions between the three concepts is essential to identifying the appropriate financing requirements for different types of projects.