🏭Gov’t gears up to launch green finance platform for factories: Egypt is working to launch a national platform to mobilize green financing for private sector factories, aiming to prepare industry players to meet increasingly strict European environmental requirements. The initiative, developed in collaboration with the European Bank for Reconstruction and Development (EBRD) and other international partners, will support low-carbon production systems and ease financial pressure on industrial investors ahead of the European Carbon Border Adjustment Mechanism (CBAM), according to an Industry Ministry statement.

Following in NWFE’s footsteps: The new platform is expected to replicate the Nexus of Water, Food and Energy (NWFE) model, offering funding for decarbonization, energy efficiency, and clean production technologies to cut emissions and strengthen export capacity to climate-sensitive EU markets. A joint technical committee will be formed to oversee priority projects and ensure that government initiatives are aligned with international financing programs.

Why now? CBAM is set to come into full effect in 2026 and could pose a threat to Egyptian exports — particularly in high-emission sectors such as steel, aluminum, cement, and fertilizers — unless local manufacturers invest in cleaner operations. The government sees green finance as a strategic tool not only to meet climate targets but also to help Egyptian companies maintain market access in an increasingly environmentally stringent Europe.

Bns in funding are on the table: The International Cooperation Ministry is expanding partnerships to secure both technical and financial support for Egyptian factories. The non-oil manufacturing sector led economic growth in the second quarter of FY 2024-2025, recording over 17% growth. International Cooperation Minister Rania Al Mashat highlighted the GSI (Green Sustainable Industries) program, which provides up to EGP 16 bn, including EGP 1.2 bn in grants, for industrial green transitions. Egypt is also among seven countries eligible for up to USD 1 bn in funding from the Green Climate Fund and CIF to support low-emission manufacturing.

Industry players are on board, but more is needed: Industry players praised the government’s push to launch a NWFE-style platform focused on green industry, calling it a step in the right direction, Federation of Egyptian Industries board member Mohamed El Bahey told EnterpriseAM. However, a local steel executive told us that small and medium-sized factories in particular need technical and advisory support to effectively work with international funding bodies.

The GSI program helped kickstart the conversation around green industry, but didn’t reach enough smaller players, Chairman of the Export Council for Chemical Industries and Fertilizers Khaled Abul Makarem told EnterpriseAM. He hopes the new platform will be simpler to access and offer tangible support, especially for factories operating in more remote industrial zones.

You can’t go green without measuring emissions: Manufacturers agree that accurate emissions tracking is now essential to accessing both financing and export markets. Compliance with tracking requirements will be key to maintaining EU market access, El Bahey stressed. Executives warn that factories lacking ERP systems or internationally certified emissions data won’t pass European checks. A unified national emissions database and formal verification system will be needed, Aboul Makarem noted, suggesting that the government should play a role in rolling them out.

Green transition is no longer optional: Environmental compliance is a must if Egypt wants to keep exporting to the EU, a local steel executive told us. “Even if we only maintain part of our export market share for now, it gives us a chance to grow later,” El Bahey said, framing emissions reduction as an investment in quality, health, and long-term competitiveness.

SMEs need targeted help: Egyptian factories vary widely in their CBAM readiness. While some major exporters have begun decarbonizing and tracking emissions, most SMEs lack the technical expertise and resources to follow suit, Aboul Makarem said. What they need is an integrated package of support, including affordable financing, tax incentives, technical assistance, and a regulatory roadmap that links green investment with export advantages, our sources told us.

Exports are already at risk: CBAM could weigh heavily on exports from Egypt’s carbon-intensive sectors, including fertilizers, steel, aluminum, chemicals, and glass. Without solid proof of emissions cuts, Egyptian products will likely face additional costs that could erode their competitiveness in EU markets.

Some factories are getting ready regardless of EU delays: One Egyptian steelmaker began shifting to low-carbon production more than two years ago, anticipating the 2026 rollout of CBAM. The company’s CEO, who asked to remain unnamed, told EnterpriseAM that the move was driven by belief that environmental compliance is now a strategic necessity for maintaining access to export markets, particularly in Europe. Even if EU rules are delayed, “The green transition is no longer optional, but a prerequisite for competition. Even if Europe delays, we cannot postpone action,” he said.

And we already have an advantage: Egypt’s reliance on electricity and natural gas gives local factories a cost edge over European peers struggling with high energy prices. “Our transition cost is much lower,” the steel CEO said, “which gives us a real competitive advantage, if we prepare and tap into available green finance.”

The transition is already underway: A number of factories are already working to green their operations, whether by improving energy efficiency, shifting to renewables, or building monitoring, reporting, and verification (MRV) systems, Aboul Makarem said. The steel CEO added that his firm has started planning for lower emissions, even if the EU’s final technical standards remain unclear.

But challenges remain: The path toward green transformation still faces several obstacles including the high cost of transition, limited access to affordable green finance, lack of strong incentives, and a shortage of skilled personnel to manage emissions or carbon reporting.

The platform could help close the gap: Easing access to international funding, particularly for energy-intensive industries, would address a key challenge, El Bahy said. But he stressed that the platform’s success depends on tying finance to legal incentives like tax breaks and technical support. He also said it must be accessible to SMEs, who make up a large chunk of the industrial base and often struggle to navigate donor requirements or international governance standards.

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