Cairo – Mubasher: The European Bank for Reconstruction and Development (EBRD) on Thursday signed a funded activity agreement (FAA) with the Green Climate Fund (GCF) to invest $1 billion in a renewable energy project in Egypt.
This investment will bolster the Egyptian government’s sustainable energy strategy, “which aims to source 20% of Egypt’s energy from low-emission renewable sources by 2022”, the EBRD said in a statement.
This initiative will give independent power producers the opportunity to invest in the initial wave of private renewable energy production in Egypt.
Funds from the agreement, the largest contribution by the GCF since it commenced full-scale operations, are set to begin in September, the statement indicated.
The EBRD will fund the project with $352.3 million, while the GCF will contribute with $154.7 million. The remainung amount will come from sponsors and other co-financiers and will bring the total investment to $1 billion.
“The FAA signing marks a benchmark in the way the fund can work with its partners to pool financial resources to boost countries’ mitigation and adaptation capacities,” GCF executive director Howard Bamsey said.
He highlighted that the FAA merely marks the potential the GCF and EBRD have in “combining their financial forces to drive climate action across various parts of the planet”.
The GCF’s board has approved three different EBRD-proposed projects, alongside the renewable energy project in Egypt, Bamsey revealed.
The other projects include a hydropower project in Tajikistan, a water conservation project in Morocco, and a sustainable energy project covering ten countries, the statement showed.
EBRD president Suma Chakrabarti commented that the project in Egypt was “the nearest to implementation among the GCF-approved EBRD project”, noting that this funding highlights the productive cooperation between the two organisations.
“Climate finance is crucial to the EBRD’s strategy. We are aiming to dedicate 40% of our annual investments to the green economy by 2020,” he said, referring to the EBRD’s Green Economy Transition policy, which was launched in 2015.
Chakrabarti further stressed to the importance of the private sector as a “major driving force in the current creation of a global green economy, including climate finance”.
