The green transition is many things — but cheap isn’t one of them. To meet the country’s updated nationally determined contributions (NDCs) for 2030, Egypt needs to mobilize some USD 324 bn, a senior Environment Ministry official told EnterpriseAM. The lion’s share of the total is earmarked for climate mitigation with USD 211 bn, while USD 113 bn is pencilled in for climate adaptation.

But despite an estimated bill totalling USD 324 bn, the country’s available funding currently stands at only USD 76 bn, leaving a USD 248 bn financing gap. The government is looking into a diverse range of funding options locally and internationally to fill the gap, which accounts for more than three-quarters of the total ticket.

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Extending the timeline to 2035, financing needs are expected to grow even further. The industrial sector will require some USD 130 bn in mitigation and adaptation funding through 2035, alongside USD 144 bn for the electricity sector, USD 57 bn for the transportation sector, and USD 76 bn for waste management, according to a government document seen by EnterpriseAM.

The government aims to raise the share of green projects to 55% of its EGP 1.1 tn public investment plan for this fiscal year, up from 15% in 2020. Key projects include the monorail, the high-speed electric rail line, a national waste management system, and expanded renewable energy initiatives. Egypt has rolled out green projects worth EGP 132 bn across several sectors since 2020, the source said.

All funding options are on the table, with the government targeting all financing instruments available through international institutions, including sukuk, green bonds, sustainability bonds, and other mechanisms, our source said. Financing remains one of the biggest challenges facing environmental solutions, given the large-scale investments needed to develop projects that meet green and sustainable standards in execution, monitoring, and maintenance, we were told.

On this front, it’s likely we could hear about sukuk-backed renewables projects soon. The government’s sukuk-funded Ras Shukier project is located in an area that has already been earmarked for several upcoming climate-friendly projects, including a green industrial zone for petrochemicals and green hydrogen that was approved by the cabinet earlier this year. The cabinet also gave an initial nod for the Transport Ministry to proceed with contracts for a green hydrogen and green ammonia project in Ras Shukeir, along with Saudi renewables giant Acwa Power and local energy and infrastructure leader Hassan Allam Utilities’ 550 MW wind farm in the area.

A still-unnamed Gulf sovereign wealth fund was gearing up to announce a big-ticket project in the Red Sea project “in the coming days,” a senior government source told us last month. In other signs that sukuk momentum is growing, Egypt issued its second-ever sovereign sukuk issuance just last week in a USD 1 bn issuance to Kuwait Finance House as a part of a wider USD 5 bn program. The government is also set to move forward with its plan to issue the first sovereign sukuk denominated in EGP at the beginning of the new fiscal year “despite current events,” Finance Minister Ahmed Kouchouk told EnterpriseAM last month.

The government is calling for more private sector involvement, particularly in the food security, agriculture, and renewable energy sectors, as part of its 2024-2027 green transition strategy, according to an Environment Ministry statement.

Around USD 500 mn from international development banks has already been used to reduce the risks associated with private investment in the renewables sector, according to the statement. A similar approach is now being applied to food security and climate adaptation in agriculture, with a focus on improving crop resilience and boosting self-sufficiency.

But going green is also an investment that can pay returns, with the country’s sizable and growing network of wind and solar projects helping shield Egypt from an even greater reliance on LNG imports to keep the lights on amid a dip in domestic oil and gas production. Having renewables play a big part in the energy mix not only leads to predictable and stable electricity prices amid a volatile international energy market, it could also lead to green energy exports.

Greening the economy will also help shield many of the country’s key sectors from the EU’s incoming Carbon Border Adjustment Mechanism — known by its acronym CBAM — particularly in the fertilizer, cement, iron, and aluminum industries. The carbon border tax will make up the difference between the local carbon price — if there is one — and the EU’s carbon price, pushing Egypt to introduce a carbon tax of its own and companies to greenify their production lines so they can stay competitive in European markets.

Your top green economy story for the week: The number of environmentally-friendly hotel rooms in Egypt surged to around 85.7k in 1Q 2025 — up from just 40k in 2022 — now representing over 37% of the country’s total capacity.

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