New €21 Million Debt Swap Tranche Signed to Improve Energy Supply, Raising Total Program Value to €297 Million
Minister of Planning, Economic Development and International Cooperation: The new agreements represent an additional step in strengthening Egypt-Germany relations in support of economic development efforts.
Dr. Mahmoud Esmat: The state has completely rebuilt its infrastructure and enhanced its legislative framework to encourage private sector participation and international financing in electricity and renewable energy projects.
As part of the strong partnership between the Arab Republic of Egypt and the Federal Republic of Germany, H.E. Dr. Rania A. Al-Mashat, Minister of Planning, Economic Development, and International Cooperation, and H.E. Mr. Jürgen Schulz, the German Ambassador to Egypt, signed a financial cooperation agreement worth €118 million (approximately EGP 6.7 billion).
In addition, a new tranche of the Egypt-Germany Debt Swap Program was signed, valued at €21 million (equivalent to EGP 1.2 billion), and aimed at improving renewable energy supply. The event was attended by H.E. Dr. Mahmoud Esmat, Minister of Electricity and Renewable Energy.
The financial cooperation agreement encompasses various fields, including a financial support agreement for the Comprehensive Technical Education Initiative. This initiative, benefiting the Ministry of Education and Technical Education, includes a €32 million grant to support the establishment of 25 Egyptian Centers of Excellence (specialized training centers and applied technology schools), by constructing approximately three sector-focused centers of excellence.
The agreement also includes €86 million—comprising €54 million in development financing and €32 million in grants—to fund the connection of Aqua Power Stations (1) and (2), enabling the offload of 1,100 megawatts of wind energy. This is part of the energy pillar of the NWFE (Nexus of Water, Food, and Energy) program.
Furthermore, H.E. Minister Al-Mashat and the German Ambassador signed a new debt swap agreement involving the Central Bank of Egypt, the Ministry of Electricity and Renewable Energy, the Egyptian Electricity Holding Company, and the German Development Bank (KfW). Valued at €21 million, this agreement will help improve the supply of sustainable and renewable energy. With this signing, the total value of debt swaps implemented between Egypt and Germany rises to approximately €297 million (equivalent to EGP 16.8 billion).
In her remarks, H.E. Dr. Rania Al-Mashat emphasized that these agreements further solidify Egypt’s partnership with Germany, contributing to economic development, climate action, and investment in human capital. She affirmed that the financial support agreement is part of an ongoing partnership, bolstered under the framework of the Egyptian-European strategic cooperation and backed by both governments’ leaderships.
H.E. Dr. Al-Mashat also underscored the importance of the €21 million debt swap agreement, which builds on cooperation initiated in 2011. Numerous development projects have been carried out under this framework, and the debt swap program with Germany is a practical application of calls to reform the global financial system.
Minister of Electricity and Renewable Energy H.E. Dr. Mahmoud Esmat confirmed that Egypt has undergone a comprehensive infrastructure overhaul and enacted legislative reforms to attract private sector and international investment in electricity and renewable energy, particularly in the renewable energy sector, making Egypt one of the most attractive destinations for investment in this sector.
He highlighted the expansion of both solar and wind capacities, driven by both domestic and foreign private sector investment, and praised the Ministry of Planning for its support of the electricity sector and the broader clean energy transition strategy.
For his part, the German Ambassador H.E. Mr. Jürgen Schulz stated that Egypt is an important partner for Germany in achieving global climate goals. This is why Germany supports Egypt with expertise and funding in its strategic investments for the future, especially in the expansion of renewable energy. From the very beginning, Germany has supported Egypt’s climate initiative NWFE as its largest bilateral partner, with assistance amounting to approximately EGP 15 billion. The projects referred to in the agreement signed by us today will make it possible to supply more than 2.5 million households with green electricity.
During COP27, the German government committed €250 million to support the energy pillar of Egypt’s country platform for the NWFE program, including €104 million in debt swaps. An agreement worth €54 million was signed in 2023 to support investment in the electricity transmission network and to connect two wind farms—Noes Wind Farm and Amunet Red Sea Wind Farm, with a combined capacity of 500 megawatts—to the national grid. Work is currently underway to sign the second tranche of the debt swap under this program, valued at €50 million.
It is worth noting that the debt swap program with Germany is governed by a structured framework to ensure optimal implementation and maximum benefit. The Ministry of Planning, Economic Development, and International Cooperation coordinates with the German side on project selection, negotiates with the German Development Bank and beneficiary national entities, and finalizes technical details and the financing agreement.