A €1.128bn development financing agreement covering the transport sector has been signed by Rania Al-Mashat, Egypt’s Minister of International Cooperation, and Flavia Palanza, Director Operations in Neighboring Countries at the European Investment Bank (EIB).
The projects are: converting the Abu Qir train line into a metro line with a length of 22 km, rehabilitating the Al-Raml tram line with a length of 13 km, and rehabilitating the Cairo Metro Line 2 with a length of 23 km, thus strengthening the transport infrastructure and enhancing the transformation strategy for sustainable transport.
The funding comes within a financing package worth €1.9bn approved by the EIB last July, which includes €800m that has been dedicated to strengthening the resilience of small- and medium-sized enterprises (SMEs) during the novel coronavirus (COVID-19) pandemic. A further €1.1bn has been dedicated to support sustainable public transport and infrastructure development.
Minister Al-Mashat underscored the value of the strategic development cooperation partnership between Egypt and the EIB, with investments worth €10.6bn. These systematically integrate the social, economic, and environmental aspects of development, and align with the UN’s 17 Sustainable Development Goals (SDGs).
The projects will also be supported through the EIB’s Economic Resilience Initiative and the EU Neighbourhood Investment Programme (EU NIP), which provide grants for technical assistance and advisory support.
Al-Mashat said that her Ministry organised a multi-stakeholder platform in July to enhance coordination between the EIB, Egypt’s Ministry of Transportation, as well as the country’s private sector to discuss financing priorities for sustainable transport.
The minister added that the new agreement aims to achieve several targets, namely: Goal 11 for Sustainable Cities and Communities; Goal 8 for Decent Work and Economic Growth; Goal 13 for Climate Action; and Goal 17 for Partnerships for the Goals.
“Understanding the value of transport infrastructure is at the heart of informed policy-making,” Minister Al-Mashat said, “Benefiting more than half a million passengers a day, we are not only reshaping Egypt’s economic geography but also meeting social and environmental targets to drive sustainable growth.”
The minister added, “We value our partnership with the EIB that has been instrumental in pushing the frontiers of ESG standards that push international cooperation across various sectors to varying projects, including the private sector.”
Palanza said, “As the European Union’s (EU) Climate Bank, we give high priority to clean urban transport projects such as trams and metros, and as part of this we signed the €1.128bn government agreement supporting this important goal for our joint cooperation.”
“This large-size financing responds to the ambitious objectives of the Egyptian government to improve people’s life by building sustainable transport infrastructure, and reducing CO2 emissions,” she added, “The first €600m tranche of the EIB support has been signed for, and we expect to sign the second tranche early next year. We are looking forward implementing these key investment projects with our Egyptian partners and the other IFIs.”
For his part, EU Ambassador to Egypt Christian Berger said that the EU is committed to support green growth in the country, in line with the spirit of the European Green Deal. The Egyptian Government and the EIB have put great efforts into bringing green, affordable, and safe transport to Egyptian citizens, he added.
Minister of Transportation Kamel El-Wazir noted that the projects come under a comprehensive national strategy to promote green and sustainable transport. He referred to the critical role that Egypt’s partnership with the EIB plays in financing electric buses, which increases the efficiency of public transport and protects the environment by reducing emissions.
According to the Ministry of International Cooperation’s annual report for 2020, the ministry secured development financing agreements worth $9.8bn during the year. A further $6.7bn was secured for financing sovereign projects, and $3.1bn in support of the private sector.
This year, the Ministry secured $1.794bn in development financing to support sustainable transportation with development partners that include the EIB, AFD, EBRD, China, and the Kuwait Fund for Arab Economic Development (KFAED).