An NWFE update on the program’s first anniversary: Bilateral and multilateral lenders have committed a total of USD 7.2 bn to the Nexus for Water, Food and Energy (NWFE) program in the past year, International Cooperation Minister Rania Al Mashat said on Sunday, during a conference in Sharm El Sheikh.

REFRESHER- The NWFE program — launched ahead of last year’s COP27 climate summit — is the government’s flagship initiative aiming to raise blended finance for nine climate adaptation and renewables projects worth a combined USD 15 bn. 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).

And we have big renewables ambitions: Egypt ramped up its renewables target to 42% of the country’s energy mix by 2030 instead of 2035 last July and upgraded its emissions reduction goal to 80 mn tons by 2030 from a previous goal of 70 mn tons. The government is aiming to produce 42% of its energy from renewable sources by 2030 and 60% by 2040.

Where’s the money going? NWFE is funneling the funds towards renewable energy projects, five projects in the field of agriculture and food security, and three in irrigation and water resources, the International Cooperation Ministry said last year.

ENERGY-

Modernizing Egypt’s energy sources: The International Cooperation Ministry wants to reduce Egypt’s CO2 emissions by 17 mn tons a year through the closure and decommission 5 GW of gas-fired power plants by 2025, saving the country USD 1.2 bn a year spent on providing the plants with fuel for operations, according to the NWFE energy pillar report.

Private sector involvement: Contracts for some 3.7 GW of renewable energy projects have already been signed between the Electricity Ministry and various private sector firms including a contract with UAE’s Masdar, Infinity Power, and Hassan Allam Utilities for a 10 GW wind farm in Sohag at a cost of USD 10 bn.

Financing the projects: Development partners have so far committed USD 3.2 bn to the energy pillar, that includes funding from the European Bank for Reconstruction and Development (EBRD)’s High Impact Partnership Fund for Climate action and the World Bank’s Transformative Carbon Assets Fund, in addition to funding from the European Investment Bank (EIB), the French Development Agency (AFD), the African Development Bank (AfDB), the Asian Infrastructure Investment Bank (AIIB), the UK, Denmark, and the Netherlands.

EBRD is behind the majority of the funds: The EBRD — the main financing partner for the NWFE’s energy pillar — has mobilized some USD 1.3bn in the form of soft development financing grants and other forms of financing. Part of this includes USD 300 mn to help in the decommissioning of power plants.

FOOD-

The NWFE’s food pillar also needs USD bns: The NWFE initiative wants to implement five projects that will support Egypt’s food security and require investments of USD 3.35 bn, The International Cooperation Ministry said in the NWFE’s food pillar report. The World Bank, the International Fund for Agricultural Development (IFAD), and the Islamic Development Bank are all acting as lead partners in food pillar projects.

Pledges of USD 1.74 bn have been made so far:

  • IFAD is committing USD200 mnto the food track and is looking to increase its investments in projects supporting rural communities tackling climate change and the capabilities of smallholders;
  • The African Development Bank (AfDB) has said it will provide more than USD 1 bn to the NWFE, split between the program’s water, food and energy tracks;
  • A number of undisclosed organizations are partnering with IFAD to provide another USD 775 mn;
  • The Islamic Development Bank, AIIB, EIB and the French Development Agency have also committed funds, the report said, without detailing their commitments.

Enhancing resilience and adaptability: NWFE will direct funds towards projects that adapt crop production in the Nile Valley and the Delta to climate change, enhance agricultural resilience in the northern Delta region affected by sea level rise, boost flexibility in the most remote and needy areas, modernize irrigation systems in old agricultural lands, and establish an early warning system.

WATER-

The water pillar has more than enough funding: The International Cooperation Ministry has secured funding of USD 2.3 bnto support its water resource development strategy, which requires USD 1.4 bnin investments, the ministry said in the NWFE’s water report. The projects aim to tackle irrigation — modernizing practices and establishing water desalination plants.

What kind of projects are being funded? Egypt will launch five water desalination plants in four governorates with a capacity of 525k cubic meters per day, rising to 1.75 mn cm/d by 2050, the report said. Solar irrigation systems will be expanded to support the reduction of CO2 emissions and make systems less vulnerable to future energy crises, while the third prong of the pillar will implement projects modernizing agricultural practices to boost water usage efficiency. Some 7.5 mn beneficiaries who rely on traditional irrigation practices are expected to benefit from the projects.

Behind the funding? The AfDB, EBRD, Islamic Development Bank, IFAD, World Bank and AIIB have all pledged funds to the water pillar.

  • The EIB, a main development partner for the NWFE’s water pillar, announced that it could commit some USD 1.5 bn for water treatment projects on the sidelines of COP27 last year.
  • Technical missions for the projects have been carried out, supported by two grants of EUR 280k from the Technical Assistance Fund for Middle-Income Countries of the African Development Bank;
  • And EUR 500k from the African Water Facility, the report notes.

Your top green economy stories for the week:

  • Oriental Weavers factory goes green: Oriental Weavers will start operating one of its Tenth of Ramadan factories using renewable energy.
  • Jan De Nul inks Mediterranean link MoU: Belgian maritime services provider Jan De Nul will start studying a project to export renewable energy of at least 2 GW from Egypt to Europe via a Mediterranean link, under an MoU inked with the EETC.
  • Our annual carbon emissions from transport cut by 1.1 mn tons: Projects implemented under the NWFE initiative have cut the transport sector’s annual carbon emissions by around 1.1 mn tons a year.
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