The Ministry of International Cooperation released the first progress report on the NWFE program to mark its one-year anniversary.
The NWFE program, which links water, food, and energy projects, has begun implementing a €104 million debt swap agreement between Egypt and Germany. This is a result of collaborations with local and international partners to secure innovative funding mechanisms to carry out the program’s commitments.
A report by the Ministry of International Cooperation has revealed that Egypt is committed to updating its Nationally Determined Contributions (NDCs) and achieving the target of 42% renewable energy by 2030, five years ahead of the original target of 2035. This commitment was made in a political declaration issued during COP27 in partnership with the United States and Germany. Egypt has already updated its NDCs in June 2023.
Egypt, in collaboration with Germany, has signed a debt swap agreement worth €54 million to enhance investments in the electricity transmission network and connect two wind energy projects with a combined capacity of 500 megawatts to the national grid. This initiative supports Egypt’s commitment to increasing renewable energy usage to 42% by 2030. Negotiations are underway to sign a second tranche of the debt swap agreement with Germany, valued at €50 million.
The report emphasizes the significance of the debt swap mechanism as an innovative financing tool to promote climate action, a strategy that is gaining traction among international financial institutions as a means of supporting developing nations and emerging economies in realizing their climate goals.
The joint political declaration outlined the mobilization of concessional financing and a debt swap worth $500 million for the energy pillar of the NWFE program. Collaborative efforts are underway with other development partners to realize this objective.
As part of ongoing cooperation with the United States, a $35 million grant has been secured to support the NWFE program. The grant will be split into two portions, with $25 million being provided through the US State Department to the European Bank for Reconstruction and Development (EBRD).
Read More on the Political Declaration:
https://mmd-moic.s3.eu-west-1.amazonaws.com/files/Political%20Statement%20-%20AR.pdf
The energy pillar of the NWFE program aims to decommission 12 thermal power plants with a total capacity of 5 gigawatts (GWs) and attract $10 billion in investments to develop 10 GWs of renewable energy projects between 2023 and 2028. This ambitious goal will be pursued through close collaboration with the local and foreign private sectors.
During COP27, partnership agreements for the energy pillar were signed with a consortium of international development partners, including the EBRD, the EIB, the AFD, the AfDB, the AIIB, the UK, Denmark, and the Netherlands. This demonstrates the strong international support for Egypt’s efforts to transition to a cleaner and more sustainable energy sector.
The Ministry of International Cooperation highlighted that the energy pillar projects align with Egypt’s Climate Change Strategy, contributing to sustainable economic growth, NDC implementation, and an annual reduction of approximately 17 million tons of carbon dioxide emissions. This reduction stems from the replacement of thermal power plants with renewable energy sources, leading to annual fuel cost savings of $1.2 billion.
