Egypt’s Minister of Finance Mohamed Maeet said that the Egyptian state is working hard to develop the global financial structure with a view to facilitating green financing in African countries in line with recent crises occurring on the international scene.
The minister added that it is crucial to prop up emerging markets, and increase their ability to deal flexibly and positively with external shocks and challenges through providing innovative tools and mechanisms that are more stimulating for environmentally friendly investments.
Maeet referred to the importance of increasing the private sector’s participation in development projects being executed across the country as it is the engine of local economic growth.
Maeet pointed out the need to attract more foreign direct investments to Africa, which will help find solutions to African challenges, including limited access to energy.
These statements came yesterday during a roundtable discussion, the Future of Sustainability in Africa on the margins of the COP28 climate conference in Dubai.
Maeet underscored the importance of boosting the competitiveness of the African private sector in green and more sustainable fields.
He pointed out that foreign direct investment flows in Africa decreased by 66 per cent in 2022, due to global uncertainty, noting Africa needs annual investments of more than $277 billion to achieve its climate goals by 2030.
Maeet said that the volume of investment flows in Africa hit roughly $30 billion, and it receives 5.5 per cent of climate financing from global banks and multilateral development institutions.
The minister said that African integration must be achieved in the face of external macroeconomic shocks, adding that it is crucial for international community to unite to increase financial tools to mitigate the negative impacts of the climate change on the human living around the globe.
He confirmed that Egypt has adopted a package of measures to stimulate climate action in sustainable sectors, which contributes to enhancing the transition towards a green economy.
Tax exemptions ranging between 33 per cent and 55 per cent have been approved on income earned from green hydrogen projects that will begin production during the next five years, as well as exempting production equipment, machinery, and raw materials needed for these projects from value-added tax.
He said that the state is aimed to direct 50 per cent of government investments to eco-sustainable projects.
The Egyptian government has adopted several initiatives for green transformation, the most important of which is the Country Platform, launched in July 2022, for the Nexus of Water, Food and Energy (NWFE) Programme.
The projects of the NWFE Programme are aimed to promote eco-friendly projects with respect to the National Climate Change Strategy 2050, and to enhance Egypt’s Vision 2030, through the active participation in financing the list of projects by development partners, international financial institutions, multilateral development banks, as well as the private sector.
The minister said that the Egyptian government is keen to diversify sources of sustainable financing. Therefore, the government has issued Panda bonds in the Chinese financial market, with a value of 3.5 billion yuan, and Samurai bonds, with a value of 75 billion Japanese yen. The step is aimed to finance environmentally friendly investments, in addition to securing financing of about $1.5 billion from multilateral development banks and international institutions.
Maeet pointed out that the Egyptian state is mobilising its energies to stimulate green investments, through taking a raft of measures, including the formation of a Supreme Investment Council headed by the President of the Republic to ensure investment flows in a sustainable manner.The New Supreme Council for Investment replaces the Investment Council that was established by a presidential decree in July 2016.
This move is part of the ongoing reform programme adopted by the Egyptian government to boost investments and economic growth in the country.