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  • Thursday, 23 November 2023

The First Follow-up Progress Report of the NWFE Program: $1.2 Billion in Concessional Development Financing and Development Grants from Development Partners to Enhance Egypt’s Ability to Make a Just Transition to Renewable Energy

The first follow-up progress report of the NWFE program was issued by the Ministry of International Cooperation on the occasion of the one-year anniversary of the launch of the program.

The NWFE program -the nexus between water, food and energy projects- revealed the volume of soft development financing and non-refundable development grants that were provided by multiple development partners and bilateral parties to enhance Egypt’s ability to achieve a just transition to renewable energy and implement the energy pillar within the NWFE program.

The report indicated that the total financial pledges announced amounted to about $1.2 billion through investment grants, technical support, and concessional development financing from multilateral and bilateral development partners, namely the European Bank for Reconstruction and Development (EBRD)-the main development partner in the energy pillar- and the European Bank's HIPCA Climate Action, as well as the European Investment Bank (EIB), the French Development Agency (AFD), Germany, Denmark, the European Union, the United States of America, the United Kingdom, the Netherlands, and the World Bank.

The report pointed out that it is being coordinated with national authorities, represented by the Ministry of Electricity and Renewable Energy, and development partners, to move forward in implementing these pledges to implement a number of projects that enhance Egypt’s transition to renewable energy and stimulate its transition to green transformation, as soft development financing has been allocated - so far - With a value of $234 million.

That, in addition to investment grants and technical support worth $60 million to implement several projects that have been identified and are being implemented to support the national network, including the Regional Control Center project in Alexandria in cooperation with the AFD and the EU, in addition to a transport line and substations project for evacuating energy from the Gulf of Suez station in cooperation with the EBRD and the EU.

There is also the “Distribution Control Centers” project in various regions of the Republic, and the smart grid development project in cooperation with Germany and the German Development Bank, which aims to add 450 megawatts to increase the capacity of the Abis station for transformers and load shedding in the new city of Abu Qir, support the stability of the network after low-efficiency power stations go out of service, and improve the access of renewable energy produced in the Red Sea region to the northern coastal region.

Regarding the technical support component, the report stated that, in coordination with the EBRD, the technical support component was activated, represented by several technical support programs being worked on with the Ministry of Electricity and Renewable Energy, the most important of which is strengthening green supply chains, which will contribute to attracting foreign direct investments and enhancing the localization of local industries, preparing the master plan to decommission 12 thermal electricity plants, and also the just transition plan that will provide training for workers in addition to providing job and training opportunities for workers in the energy sector, providing support to the Electricity Utility Regulatory Authority to set regulatory rules for energy production and sell it to the private sector using the P2P system.

The energy pillar aims to shut down 12 thermal power plants with a capacity of 5 GWs, and stimulate investments worth $10 billion to launch renewable energy projects with a capacity of 10 GWs during the period from 2023 to 2028, in close partnership with the local and foreign private sector.

During COP27, the partnership agreement on the energy pillar was signed with the EBRD, the European Investment Bank (EIB), the AFD, the African Development Bank (AfDB), the Asian Infrastructure Investment Bank (AIIB), the United Kingdom, Denmark, and the Netherlands.

The Ministry of International Cooperation explained, in its statement, that the energy pillar projects enhance the achievement of the goals of Egypt’s Climate Change Strategy to reach sustainable economic growth, implement NDCs, and reduce approximately 17 million tons of carbon dioxide emissions annually that results from the closure of stations that operate using thermal energy and replacing it with renewable energy plants, saving $1.2 billion annually that was originally spent on providing the fuel necessary to operate these plants.

To download NWFE Progress Report Number 1, click here, and here for the Arabic version.