The International Monetary Fund’s (IMF) Resilience and Sustainability Facility (RSF) could add a further USD 274 mn to the total amount disbursed to us this fall, once the fifth and sixth reviews of our USD 8 bn Extended Fund Facility are approved, a source familiar with the talks between the two sides told EnterpriseAM. The additional climate financing would come from the first two tranches of the roughly USD 1.2 bn program and bring the combined fifth and sixth review disbursals to USD 2.7 bn.

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REMEMBER- The IMF will send a mission on 1 October to Egypt to wrap up its fifth and sixth reviews, a senior government official told EnterpriseAM late last week.

But to get the extra funds, Egypt will have to make progress on four key climate-focused reforms and eventually complete them by the end of the program — which is understood to end in conjunction with the EFF in September 2026, according to guidance set out by the Fund. The IMF’s demand to phase out fuel subsidies will only be tied to our EFF arrangement with the Fund, our source clarified. The RSF’s four key reforms, according to documents from the IMF reviewed by EnterpriseAM, are:

#1- Accelerating decarbonization: Egypt needs a practical plan to achieve its decarbonization pledges, including generating 30% of its electricity from renewables by 2030 and cutting methane emissions 30% by 2030 and 65% by 2050 under its Global Methane Pledge. To do this, the IMF wants us to take the following steps:

  • Publishing a renewables roadmap through 2030, which details how Egypt will work to achieve its climate targets by the end of the decade;
  • Requiring quarterly or annual emissions reduction reports from oil and gas companies, along with the issuing of emission reduction targets aligned with Egypt’s Nationally Determined Contributions, with fines for non-compliance after a two-year grace period.

#2- Climate risk analysis and disclosure: Given Egypt’s vulnerability to climate risks, reforms should also focus on risk identification, data, and resilience, such as:

  • Publishing a quantitative analysis of long-term climate-related fiscal risks and contingencies — starting from the FY 2026-2027 budget;
  • Adopting a national disaster risk financing strategy that integrates social safety nets;
  • Establishing a National Water Council by a prime ministerial decree, which will be chaired by the PM and include key ministers and representatives from the agriculture, irrigation, housing, environment, and planning ministries.

#3- Strengthening financial sector resilience and climate finance: The Central Bank of Egypt should lead reforms to ensure banks can manage climate-related financial risks alongside supporting the provision of climate finance. The reforms should entail:

  • Ordering banks to monitor and report their clients’ exposure to the EU’s incoming Carbon Border Adjustment Mechanism (CBAM), which is set to come into effect at the start of 2026, followed by the UK’s own initiative in 2027;
  • Enforcing a regulatory framework obliging banks to adopt Environmental and Social Risk Management Systems. This should cover climate risk, with clear implementation timelines and guidelines;
  • Adding two new subprojects to the National Climate Strategy — one for adaptation and another for mitigation — with preliminary feasibility studies to attract private investment this year and adoption of further measures by June 2026.

#4- Measuring and disclosing climate impacts of investments: Egypt must adopt a system for assessing the environmental impacts of major investments, including:

  • Applying climate-related standards to all new projects worth over EGP 500 mn, which will be based on standardized climate mitigation and adaptation requirements;
  • Expanding the current asset registry pilot to cover the transport, housing, and utilities ministries, focusing on large public assets. The IMF also recommended conducting internal climate risk analyses for select assets and publishing a comprehensive overview of climate risks and mitigation measures across the government’s assets portfolio.

DATA POINT- The IMF estimates that Egypt will need to spend USD 196 bn on climate change mitigation and USD 50 bn on adaptation, while the Environment Ministry has pencilled in a higher combined figure of USD 300 bn.

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