A look into the NBE’s climate financing efforts: The National Bank of Egypt (NBE) has emerged as a significant player in climate finance through the Transforming Financial Systems for Climate (TFSC) program, through which it looks to support green projects and drive Egypt’s sustainability goals forward. We spoke with the lender’s Chief International Banking Officer Hesham El Safty to get a better understanding of the TFSC program, what it entails, and the NBE’s approach to climate financing.

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What the program entails: The TFSC program — a global financial facility financed by the French Development Agency and the Green Climate Fund — provides technical assistance and financing to sub-borrowers in 17 countries, including in Egypt through the NBE. The project in Egypt aims to encourage both new and existing NBE clients to push towards a low carbon transition through the financing of SME and corporate green loans, El Safty tells us.

The partnership between the NBE and the program has three main objectives:

  • To scale-up climate finance;
  • To densify financial flows towards more diversified private sector projects serving the ecological transition;
  • To reinforce the capacity of local partners in climate sectors.

There’s big money — and big incentives involved: The project — dubbed the NBExTFSC GreenGrowth loan — has allocated some EUR 100 mn to be invested in green projects across Egypt’s governorates — of which EUR 75 mn have already been disbursed, El Safty said.  The loans can go up to EUR 20 mn per project, offering competitive rates that are lower than commercial rates, foreign currency availability, extended tenors of up to ten years, and widened grace periods of up to two years, El Safty tells us.

The NBE, TFSC partnership has supported projects in 11 governorates around Egypt so far, including Matrouh, Alexandria, Cairo, Giza, New Valley, Red Sea, South Sinai, Qalyubia, Menofiya, Damietta, and Port Said.

The projects encompassed a number of different sectors:

#1- A water supply and desalination project: One of the projects that benefited from the program is a water supply and desalination project that provides some 11.5k cbm of desalinated water per day. The project aims to reduce electricity consumption by over 19k MWh annually, which would lead to a reduction of more than 11.5k tons of CO2 per year. It also saves almost EUR 800k in energy costs per year compared to a non-green project, according to El Safty.

#2- An agricultural project that replaces diesel generators with solar PV systems to power irrigation systems, reducing the consumption of 1.99 mn liters of diesel annually for 6k acres. This results in a reduction of over 5k tons of CO2 per year.

#3- A cold storage and refrigeration project that utilizes energy-efficient insulation panels and refrigeration systems, reducing electricity consumption by over 6k MWh annually, mitigating over 5.7k tons of CO2 per year, and achieving economic returns on energy savings that amount to around EUR 147k per year.

#4- An industrial manufacturing project that works on upgrading production lines to improve energy efficiency, reducing natural gas consumption by nearly 1 mn cbm annually and cutting over 5.5k tons of CO2 per year.

The bankability of green projects continues to be a challenge: Expanding and educating businesses on the financial and environmental benefits of green investments continues to be challenging, El Safty said. However, with sectors like water, agriculture, and energy efficiency benefiting greatly from green finance, there is vast potential for growth as more businesses realize the long-term benefit, cost savings, and competitive advantages of sustainability, he continued.

Moving forward: “We encourage businesses across Egypt to explore the financial and environmental benefits of NBExTFSC GreenGrowth loan. Whether it’s renewable energy, sustainable agriculture, energy efficiency or other areas, our program is here to support you in making a long-lasting return on investment and positive environmental impact,” El Safty concluded.

Your top green economy stories for the week:

  • Green fertilizers opens the door for voluntary carbon market listing: Green fertilizer and biogas company Empower will supply low-carbon fertilizers to agribusiness firm Lotus under a ten-year agreement the two sides inked last week. The move will open the door for Lotus to issue carbon certificates on the voluntary carbon market. (EGX disclosure, pdf)
  • Japanese firms to support green energy projects in Egypt: The Japan Bank for International Cooperation unveiled its plans to finance green energy projects locally — whether through direct investment or in partnership with regional investment institutions.
  • Cemex inks agreement to operate Assuit WtE facility: Cemex through its Regenera arm will process over 7k tons of municipal solid waste monthly into alternative fuel and organic fertilizer — its second waste-to-energy (WtE) project in the country — under an agreement inked with Assiut Governorate.
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