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  • Wednesday, 27 September 2023

The Minister of International Cooperation H.E. Dr. Rania A. Al-Mashat, Stresses the Importance of Mobilizing Blended and Innovative Finance to Bridge the Infrastructure Financing Gap in the Middle East and Africa During a Discussion Session at AIIB’s Annual Meetings

● Al-Mashat: The climate action agenda has occupied the forefront of the global agenda over the past years.

● Al-Mashat calls for restructuring the global financial structure in a way that stimulates climate financing for developing and emerging economies.

● Completion of a debt swap agreement with Germany to support the energy pillar within the NWFE program.

The Minister of International Cooperation, Dr. Rania A. Al-Mashat, participated in a discussion session entitled “How Resource Mobilization, Blended and Innovative Finance Can Help Bridge the Infrastructure Financing Gap in the Middle East and Africa,” within the activities of the annual meetings of the Asian Infrastructure Investment Bank (AIIB) in Sharm El-Sheikh, with the participation of Dr. Mohamed Farid, Chairman of the Financial Regulatory Authority (FRA), Executive Director of Africa Finance Corporation, Mr. Sanjeev Gupta, Vice President of ICBC International, Mr. Sen Yang, and CEO of HSBC Bank Egypt, Mr. Todd Wilcox

Al-Mashat stressed that the climate action agenda and financing efforts to combat climate change have occupied the forefront of the global agenda over the past years, noting the importance of moving from policies to practices to achieve sustainable development goals and not leave anyone behind, and the necessity of mobilizing blended and innovative financing to bridge the infrastructure financing gap in the Middle East and Africa.

H.E. also indicated that two high-level events were held during the meetings of UNGA78 in New York, the first of which was the Sustainable Development Summit, and the second was the Climate Ambition Summit, which reflects the close interrelation between the two topics and the importance of strengthening joint action to promote development and climate action side by side.

Al-Mashat stated that despite the large pledges made by the international community, they do not reach the countries that need them most, which undermines the ability of many developing countries and emerging economies to access long-term sustainable financing, which confirms that advancing the climate agenda. It requires financial flows commensurate with the scale of the challenges, adding that the African continent does not obtain the financing required to bridge the climate financing gap, and that 50% of financing flows are concentrated in only 10 countries. H.E. then stressed the need to restructure the global financial structure to ensure fair distribution of climate finance.

Al-Mashat went on to say, “It is necessary to have a clear framework for the transition and mobilization of investments in light of the various risks facing capital providers, including credit risks and overall risks, noting in this regard that Egypt worked, within the framework of its presidency of COP27, to issue a long-term plan - Egypt’s National Climate Change Strategy 2050- to push the transition to a green economy. The Ministry of International Cooperation issued the Sharm El-Sheikh Guidebook for Just Finance through the consultation of 100 stakeholders to promote the idea of climate justice and the transition from climate pledges to implementation by developing a unified definition of just finance and clear principles for each of the relevant parties to stimulate equitable financing.”

H.E. pointed out that following the issuance of Egypt’s National Climate Change Strategy 2050, a group of priority projects were identified in the areas of mitigation and adaptation to climate change, and accordingly, the Nexus for Water, Food and Energy Platform, the NWFE program was launched.

H.E. further stressed that the most important thing that distinguishes cooperation efforts with development partners in this regard is the Government of Egypt’s commitment to strengthening development efforts and implementing projects of priority, credibility, and clarity, which enhances confidence and opens horizons of cooperation to mobilize soft development financing, private sector investments, and grant technical support to finance projects.

Al-Mashat spoke about the approval of the Nationally Determined Contributions (NDCs), which included early approval of the goal related to increasing the proportion of renewable energy in the energy mix to 42% in 2030 instead of 2035, based on which a debt swap agreement was signed with Germany worth €54 million to support the energy pillar within the program in light of the state’s efforts to mobilize the funds required to implement the program.