On the second day of the Egypt-International Cooperation Forum (Egypt-ICF) in its second edition, a panel discussion entitled, ‘Debt for Sustainable Investment’, was held to explore performance-linked sovereign debt refinancing to channel investment that contributes to supporting ambitious action on climate and nature.
Moderated by Mina Al Oraibi, Editor-in-Chief of The National, the speakers of the panel included H.E. Dr. Rania Al-Mashat, Minister of International Cooperation, Egypt, Sherine ElSharkawy, Deputy Minister of Finance for Economic Affairs at the Ministry of Finance, H.E. Flavien Joubert, Minister of Agriculture, Environment and Climate Change of Seychelles, Dr. Mahmoud Mohieldin, UN Climate Change High-Level for the Arab Republic of Egypt, Jay Collins, Vice Chairman Banking and Capital Markets Advisory, Citi, Thomas Sberna, Regional Head – Coastal and Ocean Resilience, IUCN, Jill Dauchy, CEO of Potomac Group, Slav Gatchev, Managing Director of Sustainable Debt at NatureVest.
Minister of International Cooperation, H.E. Dr. Rania A. Al-Mashat, underscored that Egypt is looking at new and modern directions for the future of just financing to scale up investments, adding that debt swap mechanisms act as a tool to support the implementation of the Paris Agreement and ensure that development and climate change go hand in hand.
Egypt launched the debt swap program with Italy in 2001, which is currently worth $350 million and covers important areas including food security, agriculture, civil society, and wastewater treatment. Egypt’s debt swap projects with Germany are worth 240 million euros, focusing on critical sectors such as energy efficiency and technical education.
Dr. Sherine El-Sharqawy, First Assistant Minister of Finance for Economic Affairs, underlined that Egypt is exploring opportunities to propel more multilateral agreements for debt swaps, as 90% of debt swaps are bilateral in nature.
Dr. Mahmoud Mohieldin, UN Climate Change High-Level for the Arab Republic of Egypt, pointed out that negotiating debt swaps in Africa should take place within specific frameworks to implement specific objectives, including alleviating debt burdens and contributing to governments' implementation of national goals.
Moreover, he referred to the importance of activating green and blue bonds to finance adaptation, with the need to develop and implement debt reduction strategies.
For his part, Flavien Joubert, Minister of Agriculture, Environment and Climate Change of Seychelles, highlighted his country has succeeded in activating blue bonds, which is a modern tool of debt instruments to implement projects in the water and ocean sector.
For his part, Thomas Sberna, Regional Head – Coastal and Ocean Resilience at IUCN, affirmed that the importance of creating a blue economy is no less important than the transition to a green economy, noting that marine life and oceans receive the weakest percentage of funding compared to the other sustainable development goals.
On the same day, a panel session entitled, “Reducing the Cost Of Green/ Sustainable Borrowing” was held to propose tools that reduce the cost of green borrowing through the establishment of a Sustainability-Linked Sovereign Debt Hub to support the transformation of debt markets.
It witnessed the participation of high-level officials from governments, development partners and international institutions, including Sherine ElSharkawy, Deputy Minister of Finance for Economic Affairs at the Ministry of Finance, Hanan Morsy, Deputy Executive Secretary at UNECA, Selwin Hart, the Special Adviser to the Secretary-General on Climate Action, Ethiopis Tafara, Vice President and Chief Risk, Legal and Administrative Officer for the World Bank Group's Multilateral Investment Guarantee Agency (MIGA), Jake Levine, Chief Climate Officer at the U.S. International Development Finance Corporation (DFC), and Youssef Beshay, Director of the African Export-Import Bank (AFREXIM Bank).
Jake Levine, Chief Climate Officer at the U.S. International Development Finance Corporation, hailed Egypt's Country Platform for NWFE program, which serves as an example of how national decision-makers can prioritize projects for investment to eliminate funding gaps.
This year’s Egypt-ICF and the Meeting of African Ministers of Economy, Finance and Environment, will provide a platform for governments, multilateral and bilateral development partners, philanthropic foundations, private sector, think tanks, and civil society to consider the challenges the continent is offset by and explore avenues to overcome them.
The Forum’s overall objectives include: mobilization of, and access to finance, to mobilize financing and catalyze private sector investments, focused on developing countries and Africa; financing climate action, adaptation and mitigation to leverage the necessary public and private support to accelerate climate action; and providing a timely platform to explore needed national actions that would help progress towards a just and green transition.