Egypt is heading into the next review of its IMF-backed climate reform program. Six remaining reform measures stand between the government and SDR 600 mn under the Resilience and Sustainability Facility (RSF), according to the IMF’s latest staff report.

The funds become available from mid-November and are tied to completion of the third RSF review, which is expected to take place alongside the eighth review of the USD 8 bn Extended Fund Facility (EFF) — the last scheduled review before the arrangement expires on 15 December 2026. Each of the six measures carries its own SDR 100 mn disbursement, meaning Egypt won’t necessarily collect the full amount if any one of them falls short.

SOUND SMART- A special drawing right (SDR) is the IMF’s reserve asset, valued against a basket of five major currencies. It isn’t a currency; it can be exchanged for freely usable currencies among IMF members. SDR 600 mn is equivalent to some USD 820 mn.

REMEMBER- The IMF approved the SDR 1 bn RSF — equivalent to some USD 1.3 bn — in March last year to support reforms intended to strengthen the country’s resilience to climate and other long-term economic shocks. Unlike the EFF’s conventional macroeconomic stabilization agenda, the RSF focuses on climate-related public finance, investment, energy, water, and financial-sector risks.

Egypt has already pocketed SDR 400 mn of the SDR 1 bn total. The government received SDR 200 mn after completing the first two measures, covering the renewable-energy implementation schedule and banks’ exposure to companies vulnerable to the EU’s Carbon Border Adjustment Mechanism (CBAM). Another SDR 200 mn was released in July for measures three and four, one of which was completed ahead of schedule, according to the IMF.

Public investment now has to show its climate math. Climate considerations are now incorporated into the appraisal and selection of major public projects worth more than EGP 500 mn. The government has also expanded its public-asset registry to cover large assets overseen by the transport and housing ministries and begun mapping their exposure to location-specific climate risks. The initial assessment covered six major projects with a combined cost of EGP 27 bn, with the findings incorporated into the FY 2026/27 climate fiscal risk documentation.

Climate risk enters the budget: The Finance Ministry has published a quantitative assessment of long-term climate-related fiscal risks and climate-sensitive contingent liabilities. The reform is intended to put climate exposure — including risks carried through state-owned companies and public-private partnerships (PPPs) — into the government’s fiscal-risk management rather than treating it as a separate environmental issue. The analysis was published in June, according to the IMF, but remains one of the measures formally linked to the final review.

Banks get a climate-risk rule book: The Central Bank of Egypt has instructed banks to implement an Environmental and Social Risk Management System (ESRMS), requiring them to identify, assess, and manage environmental and climate risks, with full implementation due by January 2028. This goes beyond the earlier requirement for banks to report their exposure to companies facing CBAM risk. Banks will now be expected to incorporate wider environmental and social risks into their internal risk-management systems.

Disaster financing: The government is preparing a national disaster-risk financing strategy with technical support from the IMF and World Bank. The strategy is intended to determine how the state would finance the economic costs of natural disasters while integrating social-assistance measures into the response.

Water governance is also on the checklist: Egypt has established the National Water Council and issued a circular setting out the responsibilities of government bodies for producing and sharing water supply and demand data. The remaining work includes publishing a national water-allocation framework governing how competing demands are prioritized across sectors and regions.

Separately, the wider regulatory framework is changing: Law 172 of 2025 establishes a licensing framework allowing private companies to build, operate, and manage water and wastewater systems. “Its executive regulations are expected next month,” a government official familiar with the sector tells EnterpriseAM. The regulations will establish the rules governing private-sector participation, the source says.

Oil and gas companies will have to account for their emissions: The Oil Ministry is working on a monitoring, reporting, and verification system covering flaring, fugitive methane, and vented methane emissions at the operator or project level (we did a deep dive on this in July). The reform also requires a ministerial decree ordering operating companies to submit emissions-reduction targets aligned with Egypt’s nationally determined contributions.

PPPs face greater scrutiny: The final reform measure seeks to improve the government’s oversight of PPPs used to finance climate mitigation and adaptation. The government must review the procurement methods used for PPP projects awarded or contracted between FY 2020/21 and FY 2024/25 and publish a summary of its findings. The Finance Ministry must also gain access to information on all PPPs regardless of the legal framework under which they were contracted and begin publishing annual indicators covering the number and value of projects, procurement methods, and number of bidders. The measure was later expanded to also include two climate-related PPP pre-feasibility studies — one on adaptation, one on mitigation.

A more carbon-constrained export market is also getting attention. Efforts to bring industrial sectors in line with safety and emissions standards are moving forward as part of the RSF’s sustainability criteria, and are also meant to protect Egyptian exports by “assessing the impact of the EU’s CBAM on trade and the Egyptian economy,” another government official tells EnterpriseAM. The work covers emissions intensity and the competitiveness of exports from the cement, iron, steel, aluminum, fertilizers, electricity, and hydrogen sectors.

Policy responses are also on the table. Work will also center on analyzing possible responses, including regulation, financial incentives, and carbon-pricing instruments, while setting up industrial monitoring units in areas where emissions-intensive industries are concentrated, the source says. The findings could form the basis of a national climate-compatible trade strategy to help exporters.

OUR TAKE- The RSF is building the plumbing behind climate policy: risk data, reporting rules, institutional responsibility, and investable projects. The remaining SDR 600 mn hinges on proof these systems actually work, not just by announcing targets. And the timing raises the stakes: this review lands alongside that of the final EFF, where Egypt is fighting a separate battle over debt, divestment, and the state’s footprint. Closing both tracks at once leaves little room for either to slip.

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