The Egyptian- EU partnership has witnessed a qualitative shift in executed projects and expanded financing for the private sector since the launch of the "Team Europe" initiative in 2020.
Efforts have converged among European institutions, countries, and other development partners to support local and foreign private projects.
European funding totaling $5.5 billion for Egypt's private sector over 4 years has benefited large, small, medium, and startup companies.
Diversified financing mechanisms from development partners meet the private sector's requirements and reduce credit costs.
The national platform of the "NWFE" program has provided a practical model of joint efforts between development partners and the private sector to increase investments in priority sectors.
Multiple models for financing private sector projects in green hydrogen, renewable energy, and food security have been established.
Development partners' expanded financing of the private sector is based on structural reforms implemented by the state since 2014.
The European Investment Bank (EIB) has provided €790 million to 19 local and regional funds and credit lines to banks worth €3.1 billion, creating over 242,000 job opportunities.
The EBRD has invested $119 million in Egyptian companies in Europe and $456 million in European companies operating in Egypt across multiple sectors.
Development partners have financed both foreign and local private sectors to inaugurate Egypt's first dry port and first green hydrogen facility.
Egypt's exceptional and strong relations with development partners have served as a catalyst for creating joint platforms to support the private sector.
H.E. Dr. Rania Al-Mashat, Minister of International Cooperation, participated in the opening session held as part of the Egyptian-EU Investment Conference under the theme "Showcasing Egypt’s Reform Agenda & Investment Climate." Also present were Dr. Hala El Said, Minister of Planning and Economic Development; Mr. Valdis Dombrovskis, Executive Vice-President of the European Commission; Mr. Oliver Varhelyi, Commissioner for Neighborhood and Enlargement at the European Commission; Ms. Anna Bjerde, World Bank Group Managing Director of for Operations; and Mr. Karim Awad, CEO of Hermes Holding Group.
During the session, H.E. Minister Al-Mashat discussed the role of economic relations between Egypt and the European Union under the Team Europe initiative in attracting private sector investments. Dr. Al-Mashat highlighted the integration between European institutions, countries, and other development partners in enhancing the investment climate in Egypt, citing successful models and examples in this regard. The Minister also addressed the role of reforms implemented by the Egyptian government in strengthening economic relations with Europe and opening new avenues for investment.
At the outset of her remarks, Dr. Rania Al-Mashat, Minister of International Cooperation, expressed gratitude to President Abdel Fattah El-Sisi, President of the Arab Republic of Egypt and Ms. Ursula von der Leyen, President of the European Commission, for their support in transforming the partnership between the two sides into a stronger trajectory. Dr. Al-Mashat emphasized that the Egyptian-EU Investment Conference represents a significant milestone in bilateral investment relations.
Egyptian-European Relations Since 2020
Minister of International Cooperation highlighted that economic relations between the European Union and the Arab Republic of Egypt have undergone a pivotal evolution since 2020. This is primarily reflected in several developments: firstly, the quality of joint projects between the two sides diversifying across many priority development areas, not only for government projects but also for the private sector. Secondly, the various and diverse financing mechanisms provided by the European Union and European financial institutions under the Team Europe initiative for both public and private sectors. Thirdly, the integration between the European Union and other financial institutions to invest in private sector projects in Egypt.
H.E. Dr. Rania noted that over the past 4 years, this partnership has resulted in financing for projects exceeding $12.8 billion, with $7.3 billion allocated to government sectors and $5.5 billion to the Egyptian and European private sectors. This has attracted investments from European companies in priority sectors, including sustainable infrastructure, renewable energy and electricity, food security, health and education, sustainable transport, water and sanitation networks, small, medium, and micro-enterprises, environment, and solid waste management, among others. Various private sector companies have benefited from these investments, whether large corporations, small and medium-sized enterprises, startups, or entrepreneurs.
Diversity in Financing Mechanisms
The Minister added that through the European Union and European financial institutions, numerous financing mechanisms are made available, including concessional credit lines, contributions to corporate capital, and concessional financing for the private sector significantly lower than local and international market rates. Additionally, technical support, consultations, and feasibility studies are provided for project implementation.
Dr. Al-Mahat provided an example of the European Investment Bank (EIB) providing €790 million in financing over the past five years to 19 local and regional equity funds, as well as nearly €3.1 billion in credit lines to local banks including Ahli Bank and Egypt Alexandria Bank, supporting over 13,000 projects and 133 programs for medium-sized enterprises, and creating 242,000 job opportunities.
Moreover, over 80% of the European Bank for Reconstruction and Development's (EBRD) investments in Egypt have been directed towards the private sector, amounting to approximately $119 million in investments in Egyptian companies in the European Union from 2017 to 2023 in sectors such as agriculture, manufacturing, and services. Similarly, EBRD's investments in European companies in Egypt amounted to around $456 million from 2014 to 2024 in sectors including energy, agriculture, manufacturing, and services.
Minister Rania Al-Mashat emphasized that these developments have not arisen spontaneously but are the result of reforms undertaken by the state and the strategies it has adopted. Among these strategies are the establishment of the electricity tariff in 2014, the launch of the National Strategy for Green Hydrogen, and plans to incentivize renewable energy. These initiatives have encouraged numerous institutions and investors to engage in these sectors in Egypt.
Project Financing Models
Furthermore, Minister Al-Mashat pointed out that the European Union provides grants that enhance blended financing, contributing to reducing the risks and costs of financing for the private sector. A practical application of this point is seen in the national platform for the "NWFE" program, which includes diverse projects executed by the private sector and financed by European development partners such as the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB). Additionally, innovative financing mechanisms such as debt-for-climate swaps are being implemented in collaboration with the German side through a €104 million program to support the energy sector. Among these projects:
The development of the first green hydrogen production facility within the Suez Canal Economic Zone for producing "green ammonia" used in fertilizer production, implemented by Egypt Green, a consortium involving Norway's Scatec, Egypt's Fertiglobe, Orascom, and the Sovereign Fund of Egypt, with financial contributions from the EBRD.
The Kom Ombo solar photovoltaic power plant project with a capacity of 200 megawatts, financed by the European Bank for Reconstruction and Development (EBRD), the OPEC Fund for International Development (OFID), the African Development Bank (AfDB), the Sustainable Energy Fund for Africa (SEFA) under the African Development Bank, the Green Climate Fund, and the Arab Petroleum Investments Corporation (APICORP).
Several international financial institutions, such as the European Bank for Reconstruction and Development (EBRD), the International Finance Corporation (IFC), the Asian Infrastructure Investment Bank (AIIB), Proparco, and DEG, have provided a financial package of $455 million to support the development of a second container terminal at the Damietta Port. The project will be executed through a partnership between Eurogate Germany, Contship Italy, and Hapag-Lloyd, global shipping lines.
"NWFE" Program
She affirmed that the national platform for the " NWFE" program reflects the extensive diversity in our relationship with development partners and their role in supporting the private sector. European financial institutions such as the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the French Development Agency (AFD), and the German Development Bank KfW, alongside international financial institutions like the World Bank (WB), the International Finance Corporation (IFC), and the Japan International Cooperation Agency (JICA), participate actively.
H.E. Dr. Rania mentioned numerous examples of integration between European and other development partners in financing private sector investments and supporting development across various sectors. These include the dry port project, the first of its kind in Egypt, financed by the European Bank for Reconstruction and Development (EBRD), as well as the Benban Solar Energy Complex, which exemplifies partnerships between international and European financial institutions to capitalize on structural reforms in the energy sector to promote the transition towards renewable energy in Egypt.
The Minister also emphasized that the Egyptian-EU partnership has yielded numerous joint projects implemented or currently underway over the past four years, creating thousands of job opportunities, increasing private sector investments, promoting green transformation, and encouraging investment in human capital, youth, and women.
Al-Mashat underscored that all of the above would not have been possible without Egypt's distinguished and strong relations with all multilateral and bilateral development partners. These partnerships benefit both local and foreign private sectors through innovative and diverse financing mechanisms, demonstrating that international cooperation has become the common denominator for increasing investments and innovating financing mechanisms to drive development efforts.
In line with the state's efforts to enhance and increase private sector participation, the Ministry of International Cooperation launched the "HAFIZ" platform for financial and technical support to the private sector, aimed at enhancing cooperation and maximizing the impact of official development assistance in boosting the private sector's contribution to development. The platform operates in an integrated and centralized manner, linking development partners, implementing entities, government, and the local business community.