Egypt, Germany sign new debt swap agreement

Egypt and Germany on Monday signed a new tranche of a debt swap agreement estimated at €21 million to enhance the supply of renewable energy, bringing the total value of the bilateral debt swap programme to €297 million, equivalent to around 16.8 billion Egyptian pounds.

The agreement forms part of broader cooperation efforts between the two countries to support Egypt’s sustainable development and energy transition. The agreement was signed with the participation of the Central Bank of Egypt (CBE), the Ministry of Electricity and Renewable Energy, the Egyptian Electricity Holding Company, and Germany’s KfW Development Bank.

€118m agreement to support education and wind energy infrastructure

In a related context, Al-Mashat and Hartmann signed a separate €118 million financial cooperation agreement (around 6.7 billion Egyptian pounds) that covers two major initiatives: support for technical education and financing for renewable energy infrastructure.

• €32 million for Technical Support for the Comprehensive Technical Education Initiative with Egypt (TCTI)

Under the agreement, €32 million will be allocated as a grant to support the Technical Support for the Comprehensive Technical Education Initiative with Egypt (TCTI) by establishing 25 Egyptian Centres of Excellence. These centres, including specialised training facilities and applied technology schools, aim to advance vocational skills and begin with an initial focus on three centres.

• €86 million for Connecting Acwa Power wind farms

An additional €86 million—comprising €54 million in concessional financing and €32 million in grants—will fund the connection of Acwa Power 1 and 2 wind farms to Egypt’s national grid. These two farms have a combined capacity of 1,100 megawatts and form part of the energy pillar of Egypt’s NWFE (Nexus of Water, Food and Energy) programme.

NWFE energy pillar backed by Germany

Notably, Germany had previously committed €250 million at the COP27 climate summit to support the energy pillar of NWFE, including €104 million through debt swaps. In 2023, a €54 million tranche was signed to strengthen the national electricity grid and link the 500-megawatt Nuweis and Amunet wind farms in the Red Sea region to the transmission network. A second tranche under NWFE, worth €50 million, is currently being finalised.

Debt swap programme managed under joint framework

Egypt’s debt swap programme with Germany is administered through a governance framework designed to ensure effective execution and maximum benefit. The Ministry of Planning, Economic Development, and International Cooperation leads coordination with the German side, negotiates with KfW, and works with national stakeholders on project selection and financing arrangements.

Attribution: Amwal Al Ghad English
Subediting: M. S. Salama