Financing tied to Egypt’s ceramics gas-efficiency target is thin, even as 25 manufacturers sign on to cut natural gas consumption by up to 25%. The manufacturers are working with kiln suppliers, production-line makers, and energy efficiency firms toward that goal, but what’s on offer so far is general environmental compliance support, not capital sized to kiln and dryer retrofits, according to a cabinet statement and industry sources.

A parallel track under the Trade and Industry Ministry’s Shams Al Sinaa initiative, which has an active international financing push behind it, will push the same companies toward rooftop solar, aimed at cutting grid electricity use by up to 15%.

Solar’s financing case is the one moving: “Manufacturers have raised concerns about the high investment costs involved, and we are currently working to secure new international financing to enable the immediate implementation of the Shams Al Sinaa initiative,” a government official tells EnterpriseAM. “This would help improve production quality and support higher exports to European markets,” the official adds.

SOUND SMART- The 25% target sits well within reach on paper. A 2016 Unido benchmarking study (pdf) found Egyptian ceramic tile plants used 6.76 GJ per ton on average, more than double the 3.31 GJ per ton international best-available-technology benchmark. The gap is wide enough that even partial modernization should clear the target. The study, based on 2013-2015 data from 19 plants representing 58% of the sector’s capacity at the time, pointed to more efficient kilns and dryers, waste heat recovery, better process controls, and reformulated ceramic bodies as the available levers.

REMEMBER- Egypt has had this diagnosis for close to a decade. Unido, the Regional Center for Renewable Energy and Energy Efficiency, and the Egyptian Environmental Affairs Agency set up an Industrial Energy Efficiency Fund in 2018, building on a GEF-funded program that ran from 2012 to 2018. Egypt has never paired that diagnosis with capital sized to it, and this program is repeating the pattern: financing is moving toward solar rather than the gas-efficiency side the 2018 fund was originally built for.

Rooftop solar and kiln efficiency aren’t interchangeable. Solar can reduce electricity purchases, but it can’t directly replace the natural gas used to produce the high temperatures required inside kilns. Delivering the 25% gas target depends on investment within the production process itself, not the panels going up on the roof.

The bundling of solar with gas efficiency is worth reading closely, because the two targets carry very different odds of success, and financing is already tracking that gap. Rooftop solar needs no process redesign: it displaces grid electricity a factory already buys, and it’s the target with an active financing push behind it.

The gas target needs capital inside the production process itself — new kilns, dryers, and waste-heat recovery — and no comparable push has been reported for it. Pairing a low-effort, well-financed target with a high-capital, thinly financed one lets the program claim credit on the easier W while the harder, more consequential one quietly slips.

“Accelerating the energy transition requires a supportive environment, including facilitating procedures for connecting to the electricity grid, providing access to concessional financing, and expanding technical support and capacity-building programs,” Ahmed Kamal, head of the Environmental Compliance and Sustainable Development Office at the Federation of Egyptian Industries, tells EnterpriseAM. “Companies no longer view renewable energy simply as an environmental option but as a tool for managing risks and reducing costs over the medium and long term,” he says. The office’s green loans top out at EGP 12 mn per facility, Kamal adds.

Egypt has earmarked USD 10.7 bn for LNG and piped-gas imports in FY 2026/27, up 26% y-o-y, after gas imports already cost USD 2.5 bn in 1Q 2026. Every unit of gas a kiln stops burning is a unit the state doesn’t have to import at that price. A gas-efficiency target with financing this thin, against that backdrop, is a missed offset on a bill that’s growing faster than the plan meant to relieve it.

Manufacturers want that solar financing to go further: “Energy accounts for around 60% of production costs, so we need strong initiatives with banks to lower interest rates and increase the availability of loans for the transition to solar energy,” a senior ceramic manufacturer tells us. “This would help accelerate the transition and reduce reliance on natural gas and electricity,” they said.

Lower energy use could reduce operating costs and improve the carbon profile of Egyptian exporters. But ceramics and sanitaryware are not currently covered by the EU’s Carbon Border Adjustment Mechanism (CBAM). The export upside is therefore about buyer requirements and preparing for tighter carbon standards.

There’s a smaller export angle, and it’s worth sizing correctly: Egypt exported some USD 278 mn of ceramic products in 2025, per UN Comtrade data, with sanitaryware alone valued at some USD 152 mn in 2024, enough to make Egypt the world’s 11th-largest exporter in that category and Germany’s largest supplier at USD 36.9 mn.

OUR TAKE- This program is set up to succeed on the wrong half. Solar has financing moving behind it, while the gas target, the one that actually offsets Egypt’s USD 10.7 bn import bill, doesn’t. That’s the same shape the 2018 fund took: diagnosis without matched capital. With energy at 60% of production costs, an EGP 12 mn loan cap was never going to be the fix.

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