Egypt’s first mandatory green building requirement took effect on 30 June, and developers in five flagship cities are still working out who absorbs the cost. The New Urban Communities Authority (NUCA) approved the shift in December 2025, phasing it in through a one-month voluntary incentive window that closed 30 May. Since 30 June, developers in New Cairo, New Damietta, New Alamein, New Mansoura, and the New Capital have needed an accredited green certification — Preliminary, Bronze, or Silver Pyramid — to keep building. The mandate turns certification from a promotional tool into a business license developers can’t skip. But one month in, whether financing is keeping pace with a market that’s moved from voluntary to mandatory is a question still unresolved.

Estimates of the added cost vary widely. Tarek El Gammal, a member of the Egyptian Green Building Council and Sustainable Cities Committee, tells EnterpriseAM that green building standards could raise a project’s initial construction and design costs by 15-20%. Abdel Khaleq Ibrahim, a member of the Housing Committee of the House of Representatives, and Waleed Mokhtar, Iwan Real Estate Development chairman, put the increase lower, at 5-15%. Omar El Tayebi, TLD Real Estate Development CEO and a board member of the Real Estate Development Chamber, goes lower still, with a caveat: “Compliance adds only about 5% to upfront costs if it’s built into the design phase. But that figure climbs sharply if standards are bolted on after construction begins,” he tells EnterpriseAM.

Developers can engineer their way around the added cost only if it’s in the blueprint before the first foundation is poured. The extra cost isn’t necessarily lost, industry sources agree. El Gammal says the savings show up on the operating side, where heat-insulating glass cuts thermal loads and shrinks the size of a building’s AC systems and wiring. El Tayebi points to a wider payoff. “Green buildings can cut operating costs by 15-25% and water consumption by up to 40%,” he tells us. He says these savings ultimately support a building’s long-term capital value, assuming they materialize as designed.

But the mechanism doesn’t have the data to prove its premise. Pressed further, El Gammal tells us the sector hasn’t yet seen the wiring and switchgear reductions the mechanism promises. “The truth is, we didn’t see a reduction in electrical wiring and switches to that extent. Consultants never conducted an in-depth study on this aspect,” he says.

A goal is not an assurance. El Tayebi’s 40% water-savings figure reflects a ceiling target, not a track record. May Abdel Hamid, Social Housing Fund CEO, cited the same number in a statement on the government’s own Green Building Initiative, which targets a 27% cut in energy use and a 40% cut in water use. Both are best-case scenarios, not assured outcomes.

Who bears the bill?

Whether that cost gets passed to buyers depends on the asset class, industry sources say. El Gammal sees commercial and office developers as better positioned to absorb it upfront, given higher operating returns. In the residential class, the increase will likely be split gradually between developer and buyer, he says.

The choice is not about who can absorb the cost, but rather who should, other developers say. El Tayebi pushes back on loading the full bill onto buyers, arguing that a smart developer can offset costs through more efficient design and less waste. “The market has already shown it can create value through price increases exceeding 300% recently. The developers who stand out going forward will be the ones building assets that hold value for decades, not just the ones chasing the highest price,” he tells us.

The 300% figure is a currency story more than a project one. Repeated rounds of EGP devaluation and record-high inflation over the past five years have pushed nominal prices up by more than 300% in major real estate markets, including the North Coast, New Cairo, Sheikh Zayed, and the New Capital. El Tayebi’s point isn’t that developers created that value; it’s that the market’s next victors will be the ones who can hold onto it once currency-driven gains level off.

The financing gap

Mandatory certification lands at an awkward moment for credit. Mokhtar tells EnterpriseAM that high interest rates are already dampening companies’ appetite to borrow. Ahmed Amin Massoud, chairman of Menassat Real Estate, whose projects are concentrated in New Cairo and the New Capital, agrees. “Low-cost green financing is the key to offsetting the higher execution cost and keeping sustainability commercially viable,” he tells us.

International capital is coming in to fill the gap. An IFC/EDGE market snapshot from November 2023, the most recent available, found LEED certifications made up about 76% of Egypt’s cumulative certified green building floor space, with EDGE at 12.5%, even as the report noted local financing “remained limited.” That’s already changing. We reported in June that the EBRD is targeting EUR 7.5 bn (c. EGP 450 bn) in financing for Egypt over the next five years. The move is part of a bank-wide commitment to keep at least 50% of its annual business investment as green economy transition finance under its 2026-2028 Strategy Implementation Plan (pdf). Developers are encouraged to pursue EDGE or LEED certification to access it.

The IFC has moved on similar lines. In November 2024, it provided Orascom Development Egypt with a USD 155 mn sustainability-linked loan, split into tranches of USD 96 mn and EUR 55 mn, for El Gouna hotel upgrades, with a 2.5-year grace period. More recently, IFC agreed to invest USD 150 mn in Banque Misr. Half of that is directed to climate assets, and 30% of that half, roughly 15% of the total loan, is earmarked for the bank’s own green buildings.

Locally, Egypt formally adopted its national Energy Performance Certificate (EPC) scheme in December 2023, one of the first frameworks of its kind in the MENA region. The country’s first national EPCs were issued just over a year later on 17 December 2024 to two pilot projects: Badya, Palm Hills Developments’ project in 6th of October City, and a Banque Misr building.

At the public-investment level, the Planning Ministry had plans to direct 55% of FY 2025/26 public investment, about EGP 637 bn, toward green projects. This is part of a broader climb from a 15% baseline in FY 2020/21 to a 60% target the ministry has now set for FY 2026/27.

The outlook for licensing

At the moment, the process is running smoothly. The mandate took effect in the five cities through a two-step mechanism: developers must first secure a Design Approval Certificate from NUCA and the Housing and Building National Research Center before construction can begin, followed by periodic inspections and reviews as the build proceeds. El Tayebi tells EnterpriseAM his company hasn’t faced meaningful delays under this system. Building the requirements into early planning, he says, “keeps them from becoming an obstacle.” He also rejects the idea that the mandate creates an entry barrier for smaller developers, arguing it will only push out those relying on minimum-quality construction.

One decision will determine if the mandate stays workable: whether NUCA renews the facilitation package. Extended execution periods and reduced fees — the incentives granted to early movers — are now up for renewal, with no decision announced yet. Ibrahim and Massoud are pushing for that extension, arguing limited awareness kept most developers from benefiting the first time around.

What’s next? The next few weeks should show which way NUCA is leaning. Extend the package, and the mandate remains workable even for mid-size developers still catching up. Let it lapse, and the market consolidates toward the players who can already absorb the certification cost on their own balance sheets.