The Egyptian government has undertaken efforts to diversify financing for sustainable infrastructure projects, according to Minister of International Cooperation Rania Al-Mashat.
The government has also expressed its keen interest in green financing, and has followed through with this by recently issuing the first green bonds, worth $750m, in the Middle East and North Africa (MENA) region.
The minister’s remarks came during her participation at the World Bank’s annual meetings entitled “Beyond Covid-19 – A New World for Investing in the Infrastructure of the Future”. The annual meetings took place with the participation of: South Africa’s Minister of Public Works and Infrastructure Patricia de Lille; the Netherlands’ Minister for Infrastructure and Water Cora van Nieuwenhuizen; Veronica Scotti, Chairperson of Public Sector Solutions at Swiss Reinsurance; Hans Peter Lankes, VP of Economics and Private Sector Development at the International Finance Corporation (IFC); and Imad Fakhoury, Global Director of Infrastructure Finance, PPPs & Guarantees at the World Bank.
Minister Al-Mashat noted that Egypt was undergoing a gradual but significant strategic shift towards pursuing private finance and commercial investment for infrastructure prior to the novel coronavirus (COVID-19) pandemic.
Engaging with the private sector, there are currently over 1,000 companies and nearly 2m Egyptian workers involved in national mega projects. These are “contributing to a new chapter in Egypt’s economic progress”, and provided buffers for the country at the outbreak of the COVID-19 crisis, the minister noted.
She listed several indicators that show Egypt’s efforts and investments in the infrastructure sector around the country, noting that there are currently 35 projects in the housing sectors worth a total of $5.657bn. This comes alongside: 23 projects in the electricity and energy sector worth a total of $4.896bn; 17 projects in the transport sector worth a total of $4.762bn; six projects in the petroleum sector worth a total of $1.129bn; 10 projects in the irrigation and water resources sector worth a total of $982m; and 17 projects in Sinai worth a total of $1.950bn.
One other notable example of Egypt’s investments is the construction of the world’s largest solar array at the Benban Solar Park in the Aswan Governorate. The project employs more than 4,000 people, and forms part of the Egyptian government’s Sustainable Energy Strategy 2035 that aims to produce 20% of the country’s electricity needs from renewable sources by 2022.
Minister Al-Mashat added that Egypt has been able to scale up private sector involvement in infrastructure, and develop successful public-private partnership models. This can be largely attributed to its national policy encouraging private investments.
In the event of a global downturn, multilateral development banks should boost crisis lending and provide capacity building and technical support to avoid lasting socioeconomic damage and enable a faster recovery, the minister said.
Egypt’s economy is on track to grow by 2% in 2020, and is projected to rebound by 5% in 2021 as reflected in the European Bank for Reconstruction and Development’s (EBRD) Regional Economic Prospects report. The growth makes Egypt’s the only economy across all EBRD regions likely to escape recession in the 2020 calendar year, supported partly by large public construction projects and a boom in the telecommunications sector.