AfDB board approves €22 million loan to support Egypt’s electricity sector
The African Development Bank’s (AfDB) board of directors approved on Wednesday a €22 million ($24.75 million) loan to finance Egypt’s Electricity and Green Growth Support Programme (EGGSP).
The funding, provided in a challenging global context, will help meet the Egyptian government’s financing requirements in the light of the coronavirus pandemic and support a sound electricity infrastructure base, a key enabler for the private sector and for the country’s competitiveness, AfDB said in a statement.
The EGGSP reform programme aims to promote a sustainable, competitive, and diversified electricity sector that ensures secure supply and supports climate change mitigation and green growth.
“Accelerated deployment of the EGGSP reform programme is instrumental to meet energy needs, combat climate change and promote sustainable development in Egypt.” Egyptian Minister of International Cooperation Rania Al Mashat said.
“This multi-partner programme provides a model for effective coordination among development partners as we continue to collaborate with all development partners to promote for a green recovery.”
Over the last few years, Egypt has implemented robust reforms aimed at correcting macroeconomic imbalances and improving the business environment and fostering inclusive growth. This progress, however, is threatened by the impact of coronavirus on the different economic sectors, including the power sector, and on the vulnerable, AfDB said.
“The EGGSP aims to improve the security of energy supply by increasing the share of renewable energy and improving the financial sustainability of the electricity sector with a view to ensuring greater participation of the private sector in injecting more investments in renewable energy,” Egyptian Minister of Electricity Mohamed Shaker said.
Meanwhile, Yacine Fal, AfDB’s deputy Director General for the North Africa Region, said: “Whilst the pandemic has put extreme pressure on the economy and the social situation, the economic reforms undertaken by the Government of Egypt and the Central Bank of Egypt over the past few years have helped create greater resilience and provide a buffer against shocks such as the COVID-19 pandemic,”
According to the AfDB statement, the financing provided under the EGGSP support will buttress measures being taken by the Egyptian government to combat the pandemic and to protect the most vulnerable during these difficult times. It will also help stimulate new private investments in the electricity sector and increase the deployment of clean energy in line with Egypt’s targets for green growth.
Malinne Blomberg, AfDB’s country manager for Egypt, said the newly approved programme is a continuation of the Bank’s partnership with the Egyptian government on the country’s reform agenda. The Bank is shifting the focus to meet the imminent needs in light of coronavirus as well as the recovery phase that will follow and that depends on an efficient and sustainable energy sector, he added.
In addition to the partnership with the national authorities, AfDB is collaborating with the French Development Agency (AFD) and Japan International Cooperation Agency (JICA) on the Egyptian electricity programme.
