EBRD lends $235m for Egypt’s green transition drive

The European Bank for Reconstruction and Development (EBRD) will provide €200 million ($235 million) to support Egypt’s plans to transition to a green economy.

The financing package is one of Egypt’s first grid investments under its Nexus of Water, Food and Energy (NWFE) programme, the development bank said in a statement.

The EBRD will provide a loan of up to €165 million, supported by an investment grant from the European Union Neighbourhood Investment Platform of up to €35 million to the state-backed Egyptian Electricity Transmission Company (EETC).

The financing will enable EETC to strengthen the country’s electricity transmission grid by upgrading a 500kV substation in the Cairo governorate.

This investment is directly linked to the decommissioning of the Shoubra El Kheima gas-fired power plant, one of the thermal power stations scheduled for decommissioning under the NWFE programme.

Additionally, the investment will support the construction of a high-voltage overhead transmission line to supply more than 2.1 gigawatts of renewable energy from the Gulf of Suez region.

The two projects will reduce transmission losses in the country’s power system, reducing annual carbon emissions by 22,584 tonnes of CO2 equivalent.

The NWFE programme was launched in 2022 and aims to advance Egypt’s national climate agenda by mobilising climate finance and private investment in support of the green transition.

The EBRD is Egypt’s lead partner on the programme’s energy pillar, having pledged more than $500 million.

“Modernising our national electricity grid is foundational to integrating the 22GW of renewable capacity that is targeted by 2030,” Egypt’s minister of electricity and renewable energy, Mahmoud Esmat, said.  

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This month Egypt’s energy and mineral resources ministry approved the sale of Jabal Al-Zait wind farm on the Red Sea as part of the country’s privatisation drive.

The European Union provided a €30 million grant to the project, which cost €340 million. Several other European donors also contributed.

In November Egypt and Germany signed an economic cooperation package of €295 million ($340 million) to support renewable projects under the NWFE programme.