Egypt: AfDB Okays €83 Million for Power Project

By Development Diaries
June 21, 2021

African Development Bank (AfDB) has approved an €83 million loan to finance the second phase of the Electricity and Green Growth Support Programme (EGGSP) in Egypt.

The funding, which is part of the AfDB’s budget support to Egypt, is expected to bolster the country’s private sector and accelerate its recovery from the Covid-19 crisis.

Development Diaries understands that the EGGSP seeks to enhance the power sector’s financial sustainability, governance and operations.

The main goal of the programme is to promote a sustainable, competitive and diversified electricity sector and support climate change mitigation and green growth.

‘Egypt’s Vision 2030 instills the sustainability ethos across all sectors. Energy and electricity are amongst the top sectors in Egypt’s international development cooperation’s portfolio, pushing towards a green reform’, the country’s Minister of International Cooperation, Rania Al Mashat, said.

‘With 2021 being the year of private sector engagement, the Electricity and Green Growth Support Programme will contribute towards sustainable growth and job creation and catalyse the development of Egyptian private entities’.

The AfDB Deputy Director General for North Africa, Malinne Blomberg, said the bank will continue to actively engage with the Egyptian government and private sector companies to support the country’s medium-term development plan and economic reforms.

The Agence Française de Développement and the Japan International Cooperation Agency have also provided financial support to the EGGSP, which is a response to Covid-19 crisis in the country.

Over the last few years, Egypt underwent an impressive wave of reforms aiming to correct macroeconomic imbalances, improve the business environment and foster inclusive growth.

However, the Covid-19 pandemic has adversely affected the reforms.

Power sector challenges related to weak financial position of the utility due to below-cost tariffs, and barriers to private sector investment, especially in small-scale renewables and energy efficiency, remain to be tackled.

The EGGSP aims to support the government in maintaining the reform momentum to limit the deterioration of macroeconomic balances and create additional fiscal space that enables it to expand social spending, especially on health for combating Covid-19.

Source: AfDB