Egypt has a water scarcity problem: Egypt faces an annual water deficit of around 7 bn cubic meters and could see its water resources run out by 2025, according to a 2021 UNICEF report (pdf). On top of this, the interrelationship relationship between water, food, and energy means that water scarcity issues can have serious knock-on effects on the country’s food security, public health, and renewable energy ambitions, says an Egypt-focussed report (pdf) by the British government’s development finance institution British International Investment (BII).

Water scarcity? The terms refers to “the amount of water that can be physically accessed, as supply and demand changes. Water scarcity intensifies as demand increases or as water supply is affected by decreasing quantity or quality,” explains UN Water.

The Nile is shrinking: By 2030, Egypt is expected to import more freshwater — through virtual water trade — than the volume of locally supplied water from the Nile, said a Carnegie Endowment for International Peace report (pdf). Sea level rises and seawater intrusion into the Nile have already begun to deplete the river’s freshwater supply and cause the river to shrink 3-5 mm per year.

SOUND SMART- Virtual water imports are when any commodity — not just food — that consumes water in its production is imported. When a country imports water-intensive crops like rice or sugarcane, or from notoriously water-intensive industries like textiles, it means that the country doesn’t have to use up its water resources on these goods.

Climate change is damaging our agricultural sector: Egypt’s food production could decline by 5.7% by 2050, a higher share than the 4.4% decline projected for the rest of the world, says the World Bank’s 2022 Egypt Country Climate and Development report (pdf). Increasingly frequent droughts are projected to reduce irrigated land in Egypt by 22%, productivity per irrigated hectare by 11%, and agricultural employment by 9%, the report adds.

Demographic factors compound the issue: Egypt’s current population growth projections — which stood at 1.6% per year in 2022 — and water resource trends indicate that by 2033 Egypt will reach the absolute water scarcity threshold — which the UN defines as 500 m³ per person per year — the World Bank said. Water share has fallen 60% since the 1980s in Egypt to 663 m³, according to data from the German Academic Exchange Service.

SO, WHERE DOES EGYPT STAND ON COMBATING WATER SCARCITY?

The way forward: Egypt needs to identify the risks to water scarcity and input “system-wide” solutions that increase private sector financing within the water sector in order to build climate adapted and resilient water systems, writes BII.

Collaboration is the name of the game: Increasing private sector involvement in Egypt’s water sector via public-private sector partnerships (PPPs) will mobilize multiple financing streams for climate-resilient infrastructure as well as standalone interventions and the introduction of new technologies, writes BII, pointing to costly, large-scale projects such as network digitalization, lining water canals, integrating solar energy into irrigation, establishing wastewater reuse to electricity infrastructure, improving water and wastewater plant efficiency, and increasing the uptake of digital precision agriculture.

Consider every drop: Venture capital firms and local commercial banks are better placed to make decentralized investments in demand-side management interventions such as implementing efficient irrigation systems in farms, sensor activated water taps in hotels and restaurants, and digital residential water meters in homes, says BII. The most climate-resilient strategy will include a diverse set of approaches alongside national projects such as renewable energy-powered desalination and water and wastewater treatment plants, agrees the World Bank.

Regulations will calm nervous private sector investors: “Policy and regulatory frameworks can help attract private investment,” argues the BII. The UK-government backed impact investor added that these frameworks should be designed around the entire water value-chain to enable standalone projects to “respond to climate risks” and “contribute to system-wide resilience.”

The good news? DFIs have already committed a lot of funding for our water-focused projects: The International Cooperation Ministry has secured funding of USD 2.3 bn through its Nexus for Water, Food and Energy (NWFE) program, which will go towards supporting its USD 1.4 bn water resource development strategy.

Remember: Egypt’s NWFE program aims to integrate climate-related issues within the water, food, and energy sectors and mobilize financing for projects that cross the three pillars. The program wants to reduce Egypt’s emissions levels, improve air quality, and ensure access to reliable and clean energy sources, all in line with the country’s nationally determined contributions (NDCs).

Newer power plants are already using more water-efficient options: Egypt’s three Siemens-built power plants have all introduced measures to reduce the use of fresh water for cooling, writes the International Energy Agency (IEA) in its 2023 Climate Resilience for Energy Transition in Egypt report. The 4.8-GW Beni Suef power plant — which is up for a sale under the government’s privatization program — has a closed-loop cooling tower system that reuses cooling water. Similarly, the New Administrative Capital Power Plant adopted an air-cooling system with 12 giant fans, the first of its kind in the country. Another power plant in Burullus has wet cooling towers that use water from the Mediterranean Sea instead of freshwater.

Getting creative on climate governance: Egypt has also signed a food security partnershipwith the Republic of Congo that will see Egypt invest in the cultivation of 20k hectares of arable land in Congo’s water-abundant Mossendjo, in exchange for 60% of its wheat and rice yields.

Your top green economy stories for the week:

  • Egypt is exploring the possibility of launching a 2.5 GW renewable energy park in Aswan and Sohag governments with investments worth USD 2.5 bn. (Enterprise Climate)
  • Plastic recycling project: Youssef Allam Group wants to set up a USD 15 mn plastic recycling project in the Sokhna Industrial Zone.
Tags: