Egypt increases partnerships with US private sector to boost green investment
▶ Two American companies sign deals with Egyptian government to set up eco-friendly projects
Egypt is seeking partnerships with the US private sector to boost green investments in the Arab world’s third largest economy as the country prepares to host Cop27 in November.
The country is “exploring new horizons for green projects” and expects the GreenTech mission – a high-level delegation of US government and company representatives exploring climate-friendly business opportunities – to play an important role, Egypt’s Prime Minister Mostafa Madbouly said.
“Egypt assumes the coming presidency of Cop27 with a clear realisation of the importance of global efforts on climate change, including the indispensable role of the private sector and other stakeholders,” Mr Madbouly said during a GreenTech event in Cairo on Monday.
Egypt is working to accelerate the energy transition process in the region by investing in renewables and other forms of clean energy such as hydrogen. The country is aiming to increase renewable energy sources to 42 per cent by 2035.
The US is Egypt’s third-largest trade partner, with cumulative investments of $24 billion so far this year in the energy, petrochemicals and manufacturing sectors, Mr Madbouly said.
The delegation, which began its three-day visit to Cairo on Sunday, comprised senior representatives from the US government and financing agencies, as well as about 40 American companies and financial institutions. Among the companies were Apache Corporation, Baker Hughes, Boeing, Chevron, General Electric, General Motors, Google, Honeywell, HSBC, IBM, Pepsi, Standard Chartered and Uber.
US companies signed two agreements for green projects with the Egyptian government on Sunday.
Renewable energy solutions company Energy3 signed a pact with the Ministry of Environment to build a recycling plant in Fayoum that will turn waste into biodiesel and sustainable innovation company Okeanos finalised a deal to build a $50 million factory that will produce limestone alternatives to single-use plastics.
Ambassador David Thorne, senior adviser to the US Special Presidential Envoy for Climate John Kerry, said the mission reflected a “broad commitment across the Biden-Harris administration to engage the private sector in combating the climate crisis and to support Egypt on its green growth pathways”.
Mr Thorne commended Egypt for sending a “clear signal” that highlights the importance of the private sector’s contributions to the country’s green transition.
The Arab world’s most populous country has turned increasingly to the private sector as it struggles with the economic fallout of the Russia-Ukraine war.
Some of the challenges facing the Egyptian economy include a higher import bill, a rising budget deficit, surging inflation, a depreciating currency and declining tourism revenue. Mr Madbouly on Sunday outlined a plan to sell state assets to private investors in an effort to attract $40bn in investment over the next four years and projected a plan to increase private investment from about 30 per cent of Egypt’s total to 65 per cent within three years.
Egypt has lowered its economic growth forecast from 5.5 per cent to 4.5 per cent for the fiscal year that begins on July 1, Mr Madbouly said.
The Egyptian government is prioritising investments in the energy, telecoms and tourism sectors, he said.
Mr Madbouly also emphasised the need to find stable renewable energy sources “as an emerging economy with a growing population”.
Foreign Minister Sameh Shoukry, who will also serve as Cop27 president, and Mr Kerry launched the US-Egypt Climate Working Group in February.
Egypt will declare its revised Nationally Determined Contributions within weeks, Mr Shoukry said during a ministerial meeting on climate change in Copenhagen last week.
President Abdel Fattah El Sisi has criticised developed countries for not fulfilling the $100bn annual climate financing promised to developing countries.
Mr Kerry said in March that he expected rich countries to meet their pledge next year, though the original target had been set for 2020 at a 2009 UN climate summit.
Jack Levine, chief climate officer at the US International Development Finance Corporation, who attended the Monday’s GreenTech event in Cairo, said there was no single government in the world that could fill the climate finance gap, which was why the private sector’s help was needed.