The Madbouly government is gearing up to issue carbon credits for renewable energy projects exceeding 10 MW, a government source told EnterpriseAM. The projects will be listed on the Egyptian Climate Exchange (EGCX) once they go online, later this year or early 2026.

The current challenge is pricing, as Egypt has so far relied on international benchmarks when it comes to pricing carbon credits, but the introduction of an organized mechanism will allow for a fair pricing system for these certificates, the source said.

Several entities are overseeing the drafting of this mechanism, including the electricity and environment ministries, alongside the EGX and the Financial Regulatory Authority.

Reducing the cost of electricity production: The government hopes that efforts to expand the country’s renewable capacity and the new carbon pricing mechanism will help slash Egypt’s monthly EGP 25 bn electricity production bill, the source said. Revenues from carbon certificate sales will be used to reduce costs and finance more renewables projects.

Big plans ahead: The state aims to raise renewables’ share in the energy mix to 20% in FY 2025-26 — up from 12% the year before — and eventually to 42% of the country’s total energy mix by 2030. Some 12.7 GW — 3.8 GW of solar and 8.9 GW of wind — are already in development, a government source told us. More than 97k feddans of land have been earmarked for projects in the Red Sea governorate.

The government will be stepping back from direct investment in renewables projects, allowing private companies to develop them under partnership models. The private sector is currently developing some 4.6 GW, according to government data seen by EnterpriseAM.

REMEMBER- The EGCX launched in August of last year, becoming Africa’s first carbon market. It allows companies to issue, sell, and buy voluntary carbon certificates in Egypt and Africa to offset emissions. The voluntary carbon trading market was branded as the Egyptian Climate Exchange back in May.

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