EIB allocates €271 m to Egypt’s climate action, help firms abide by CBAM

02 / 07 / 2024

• news
• The New Republic

The European Investment Bank (EIB) announced support for a €271 million businesses financing scheme to enable industrial companies across Egypt to cut pollution, improve energy efficiency, increase renewable energy use, scale up circular economy business practices, and strengthen environmental standards.

The announcement was made at the EU-Egypt Investment Conference in Cairo.

The new €135 million EIB Global financing, alongside €30 million grant from the European Union, to be managed by EIB Global, and financing from French Development Agency, AFD, is expected to unlock nearly €271 million in climate-focused business investment, contributing significantly to Egypt’s transition to a low-carbon and more climate and environmentally friendly economy.

EIB Global will provide €135 million for the Green Sustainable Industry scheme that will also help Egyptian companies to comply with the European Union Carbon Border Adjustment Mechanism (CBAM) when the carbon levy is imposed from 2026 onwards.

The largest ever EIB Global support for climate focused business investment and the complementary grant agreement with the European Union were signed by Rania Al-Mashat, Minister of International Cooperation, Yasmine Fouad, Minister of the Environment, Gelsomina Vigliotti, Vice President of the European Investment Bank and Gert Jan Koopman. Director General, DG NEAR, European Commission.

“International cooperation is the cornerstone of being able to accelerate progress towards the green transition. Today with the EIB, we signed the Green Sustainable Industry financing initiative, signaling a national commitment to support the transition of industry in Egypt to a green economy, decrease industrial pollution, and reduce carbon emissions by putting forward renewable energy and circular economy strategies, all in line with the Government of Egypt’s priorities. As the European Union’s climate bank, the EIB is one of our long-standing partners in climate initiatives and in the green transition, especially as the lead partner of the sustainable transport pillar in Egypt’s Country Platform for the NWFE Program, hence we look forward to more work together as we chart a course towards a greener and more prosperous future for Egypt,” said Dr. Rania A. Al-Mashat, Minister of International Cooperation of Egypt.

“The Ministry of Environment has been working hand in hand with the Industrial Sector since 1997 to maximize the efforts to achieve environmental compliance and environmental sustainability. The Green Sustainable Industry Project, reflects the successful previous three phases of the Egyptian Pollution Abatement Programs. It is phase 4 in the series of industry support actions that will build on the previous achievements in order to maximize the impact of reaching a green sustainable industrial sector. GSI will provide support for the industrial enterprises to invest in elimination of industrial pollution to air, water, soil and workplace;  decarbonization using cleaner fuels such as renewable energy, low carbon hydrogen, biogas and alternative fuels; and sustainable industry practices such as energy efficiency, resource efficiency and circular economy interventions. In addition to the financial support, the technical assistance provided will help the industries identify the technological solutions they will implement to perform efficiently and respond effectively to the local and global climate and environmental challenges,” said Dr. Yasmine Fouad , Minister of Environment of Egypt.

“The Green Sustainable Industry program shows how Egyptian and European partners are tackling climate change together. By combining technical understanding and financial engagement, Egyptian companies will be better able to access climate finance and unlock large-scale new investment that drives renewable energy adoption, enhances recycling and reduces pollution. EIB Global’s backing for the €271 million scheme for climate action and environmental protection formally agreed at this week’s EU-Egypt Investment Conference represents the largest-ever dedicated support from the European Investment Bank for climate-focused business investment in Egypt and demonstrates our shared commitment to climate action and sustainable development,” said Gelsomina Vigliotti, Vice President of the European Investment Bank.

Neighbourhood and Enlargement Commissioner Olivér Várhelyi said: “The European Union is proud to contribute €30 million to the Green Sustainable Industry program in Egypt, a key priority of our support to the country and a crucial step towards a more sustainable future. This significant investment will play a vital role in mitigating climate change and driving the transition to a CO2-neutral economy. Through this program, we will work to reduce industrial pollution, decarbonize the Egyptian economy, and enhance resource efficiency. Building on the discussions at today’s EU-Egypt Investment Forum, which we co-organized with Egypt, we will continue to make substantial funds available to support Egypt’s green transition and facilitate future investments.”

This initiative builds on the EIB’s backing for targeted business investment to reduce industrial pollution over the last two decades. In recent years EIB Global has supported a range of industrial investment across Egypt to reduce pollution.  The new initiative announced today will further strengthen targeted support for circular economy, energy efficiency and sustainability investment by industry, key priorities of the EU Global Gateway initiative.

The Green Sustainable Industry program has been developed by the Egyptian government, the financial sector, and businesses alongside Team Europe partners, including France and the European Union, in a unique climate focused partnership.

Implementation of the program will benefit from dedicated technical and digitalization best practice technical assistance.