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Egypt to receive half EBRD regional funding in 2024 

Workers make tiles at a small factory in Old Cairo. The EBRD provided €400 million to SMEs in Egypt in 2023. Reuters
Workers make tiles at a small factory in Old Cairo. The EBRD provided €400 million to SMEs in Egypt in 2023.
  • Launched in region in 2012
  • Egypt took 55% of 2023 funds
  • Focus on renewables and SMEs

Egypt will receive the lion’s share of the European Bank for Reconstruction and Development’s regional funding in 2024, having accounted for about 55 percent of its funds this year, the regional head of the EBRD has told AGBI

“Egypt is by far our largest country of operation in the region and will account for more than half of our funding next year,” said Heike Harmgart, the managing director for the Southern and Eastern Mediterranean (Semed) region at the EBRD. 

“It’s really been battered by numerous macroeconomic shocks this year, but there have also been some positives in terms of the commitment of the government to move towards a greener energy mix.”

At the Cop27 climate summit in Sharm El Sheikh last year, the EBRD partnered with development organisations and the Egyptian authorities to launch a programme called Egypt’s Nexus for Food, Water and Energy. It seeks to implement green projects by attracting foreign funds. 

The EBRD committed around $1.3 billion in funding for the energy pillar, which aims to replace 5GW of fossil fuel plants with 10GW of solar and wind energy by 2028.

The bank also originated two of the three projects that form Egypt’s Green Climate Fund, which will add 1.8GW of renewable energy: a 500MW wind project in the Gulf of Suez area, and a 200MW solar power project at Kom Ombo.  

The challenging economic conditions – in both Egypt and the region more broadly – have kept private investors watching from the sidelines this year, said Harmgart. 

In September the EBRD revised its 2023 growth forecast for the Semed region downward to 3.7 percent in 2023 and 3.9 percent in 2024, citing delays in structural reforms and increased external and fiscal vulnerabilities.

The EBRD provided around €400 million ($437 million) in funding this year towards supporting small and medium-size enterprises in Egypt, and this will be a focus for the bank in 2024.

“We’re really trying to encourage the Egyptian banking sector to reach out to the real economy, particularly in remote regions,” said Harmgart. 

Morocco, Tunisia and Jordan

Morocco is expected to receive the second largest share of funds in 2024 – having accounted for around 25 of funding this year – with the remaining 20 percent to be split between Tunisia and Jordan. 

The EBRD is not planning any new investments into Lebanon given the country's political deadlock.

It invests into the West Bank and Gaza through an off-balance sheet trust fund, which disbursed €100 million in the five-year period from 2017 to 2022, when it was granted approval to renew the fund for another five years.

EBRD Semed managing director Heike Harmgart: "Egypt is by far our largest country of operation in the region"Supplied
EBRD Semed managing director Heike Harmgart: "Egypt is by far our largest country of operation in the region"

“We are a very market demand driven organisation,” said Harmgart. “It's not the case that at the beginning of the year I get an envelope and divide up all the funds. However, broadly speaking, our funding allocations in 2024 will mirror those from last year.” 

The EBRD’s focus for Morocco is energy transition. This year it has provided green financing through Moroccan banks and worked with state-owned entities. 

Earlier this month, Harmgart spoke on a panel at the Cop28 summit in Dubai alongside Paddy Padmanathan, vice-chair of Xlinks, which is overseeing the $27 billion Morocco-UK renewables project, about the role that green electrification can play in the energy transition.

The north African country announced at the summit that it wants to produce more than half of its electricity from renewables before 2030, which will require $9 billion in investment. 

“Morocco is really developing plans to exit coal over the next few years and has amazing renewable potential,” said Harmgart. “And so that provides a big opportunity for us to work with them even more intensively next year.”

The EBRD is also keen to increase its funding for solar and wind projects in Tunisia. Harmgart noted that the bank would be looking at working with similar players to those that it has already invested with in Jordan, Egypt and Morocco. 

“We’ve done a lot of policy dialogue and a lot of work with the public sector to build the case for more renewables,” she said. “We’re seeing now the conclusion of the first round of solar auctions and we’re negotiating the final PPA [power purchase agreement].” 

The falling cost of wind and solar production is helping to reduce the electricity costs associated with desalination in Jordan, which will remain the EBRD’s focus in the country.

Harmgart also sees potential in collaboration on projects between Jordan and Iraq. The latter became the EBRD's newest member in November. 

“There’s of course huge linkages between the two countries in terms of banking and the power sector,” she said. “We see the potential for an electricity connection to address the different peak demands between Jordan and Iraq. There's a lot of interest from the investor side.” 

Since launching its operations in the Semed region in 2012, the EBRD has invested €20.4 billion across 377 projects, 77 percent of which were in the private sector. It posted a record investment of €2.4 billion across 50 projects in the Semed region in 2022.

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