Finance in Common Launching Ceremony at COP27: EUR 150 million commitment for the acceleration of the Sustainable Development Goals in Egypt

At the occasion of the COP27 in Sharm El Sheikh, Agence française de développement (AFD) launched on 10th November with the three major Egyptian banks; National Bank of Egypt (NBE), Banque Misr (BM) and Banque du Caire (BDC) the Finance in Common Program in Egypt. It comprises credits lines and grants for a total amount of more than EUR 153 million including a EUR 13.25 million grant from the European Union. The Finance in Common Programs are in line with the Egyptian financial system in its contribution to the objectives of the “2030 Vision” of the Egyptian Government to achieve Sustainable Development Goals by 2030.

The launching ceremony was held at the European Union Pavilion in the presence of HE Mr Marc Baréty, Ambassador of France to Egypt, Mr Rémy Rioux, CEO of AFD,  Ambassador Christian Berger, Head of EU Delegation to Egypt  and the three Chairmen, Mr. Hisham Okasha of National Bank of Egypt, Mr. Mohamed El Etreby of Banque Misr and Mr. Tarek Fayed of Banque du Caire.

In his introductory speech, Mr Marc Baréty underscored that “it is critical to valorize this valuable French-Egyptian partnership in favor of sustainable finance during COP27. The French-Egyptian partnership has a longstanding successful story. Since 2006, AFD has, in all circumstances, stood alongside Egyptian partners, with nearly EUR 3.1 Bn commitments to date, in sustainable sectors such as clean energy, low-carbon urban transports, natural resources, support to SMEs, agriculture, health and social protection, sectors that are the most aligned with the COP’s strategic objectives.”

In his speech, Mr Rémy Rioux highlighted that “Egypt presents the ideal characteristics for the development of a successful Finance in Common operation and can serve the purpose of displaying the way forward for public banks worldwide. It can rely on a strong financial system and some of the largest banks of the African continent; a growing expertise and experience on sustainable finance; and a governmental framework encouraging initiatives to achieve the SDGs by 2030. For this reason, AFD is proud to launch, for COP27, our ‘Finance in Common’ operation. AFD is proud to play a role in accelerating the integration of sustainable development goals (SDG) into the sector’s financial planning and activity.”  It should noted that over the past 15 years, out of the EUR 3.1 billion committed, AFD in Egypt has committed more than EUR 1 billion to support public banks, supporting 20.000 SMEs and 40.000 decent jobs.

Ambassador Christian Berger stressed the importance of this joint effort of the European Union and France in a true Team Europe spirit to contribute to Egypt’s Sustainable Development Strategy 2030. He confirmed EU’s commitment to make financial markets more sustainable with investment directed to the achievement of Sustainable Development Goals’ targets. Overcoming the challenges of the private sector, especially small businesses, and improving their access to sustainable investments can be a powerful force for creating innovations and jobs, integrating women and youth in the economic mainstream and strengthening economic resilience. He also highlighted that the ongoing direct EU support to the private sector is about EUR 695 million, of which EUR 72 million are in grants and EUR 623 million leveraged from international financial institutions including the AFD.

Mr. Hisham Okasha, Chairman of the National Bank of Egypt (NBE), welcomed the signing of the new facility with the French Agency for Development (AFD), and expressed gratitude to the support offered by the European Union (EU) as a donor. Okasha pointed out that this success was the result of the fruitful and lasting strategic partnership between NBE and AFD, which have a longstanding successful relationship for well over a decade now, with programs such as the Egyptian Pollution Abatement Program (EPAP), tackling pollution issues in the country, as well as other facilities in energy efficiency and low carbon technologies that have positive climatic impact, in addition to providing necessary funding for Small and Medium Enterprises (SMEs). Moreover, NBE's engagement with AFD on Transforming the Financial Systems for Climate (TFSC), is an obvious example of the kind of support that the Egyptian financial system requires in order to catalyze and advance the attainment of Egypt’s strategic objectives under the guidance of the Central Bank of Egypt (CBE), and as espoused under the Sustainable Development Strategy Egypt Vision 2030 and the National Climate Change Strategy 2050.

Mr. Mohamed El-Etreby, Chairman of Banque Misr, stressed that “It is an honor to be part of this agreement, as it is a step towards integrating more significantly the principles of sustainable finance and will improve our capacities to contribute to Vision 2030, using the support of the technical assistance that will be offered through the agreement, the funded investments will target essential thematic in the objective of achieving the SDGs in Egypt.”

Mr Tarek Fayed, Chairman of Banque du Caire, said that “Banque du Caire's leadership in the field of microfinance, which spans more than 20 years, has given us a unique opportunity to continue contributing to a more sustainable financial market, where the bank has succeeded in the field of microfinance in providing about 1,300 million jobs and sustainable productive projects that serve various segments, most notably youth and women. He also highlighted that with the continuous changes the financial ecosystem is witnessing due to the impact of climate change, the need for green and sustainable financial solutions is vital for sustainable economic growth now more than ever. Banque du Caire’s ability to tap into our experiences as leaders in the microfinance sector with previous initiatives to support women, youth and people with disabilities  have put us at the forefront and gave us a unique opportunity to continue contributing to a more sustainable financial market.  As well as develop effective partnerships that help us build a stronger portfolio. Banque du Caire is building the frameworks and forming strategic partnerships that will help us bring the most innovative green financial solutions to market and guarantee a smooth transition into a greener economy. This agreement confirmed today will allow us to increase financing for businesses and enhance targeted financing for sustainable investment, it will enable even stronger support for business investment and enable smaller companies to grow, create jobs and harness new business opportunities. BM is always keen to enter into cooperation protocols to enhance the financing of projects of different sizes, this comes from BM leading role in supporting the Egyptian Economy and achieving sustainable development.”

Annex – Program description of “Finance in common”

Main components

• Three credit lines to NBE (EUR 50M), Banque Misr (EUR 50M) and Banque du Caire (EUR 40M) aiming at the financing of investments contributing positively to reaching the SDGs (including an objective of 30% of projects showing a climate co-benefit);
• A premium scheme up to EUR 10M maximum (grant from the EU) aiming at encouraging the MSMEs offering investments with strong positive impacts on gender and/or climate. In an innovative way, the premium scheme could also support the MSMEs in implementing action plans to improve their internal practices on gender and/or climate.
• A program of technical assistance for an amount of EUR 3.25M (grant from the EU) managed directly by AFD with the following expected scope of activities:

- Accompanying the internal transformation of partner banks in the fields of sustainable development, management of environmental and social risks and integration of climate risks;

- Supporting the construction of pipelines of eligible investments and the integration of structural gender and/or climate changes to the benefit of the end-beneficiaries that are MSMEs;

The main results expected

It is expected that the Egyptian financial system, including the three largest banks of the country, will integrate more significantly the principles of sustainable finance and will improve its capacities to contribute to Vision 2030. Thanks to the support of technical assistance, the funded investments will target essential themes with the objective of reaching the SDGs in Egypt. Moreover, it is also expected that the banks will be in a better position to monitor and evaluate the impacts of their financing on sustainable development. 

Press contact :

• AFD : Atika Ben Maid - +(202) 27351788