Green economy is meant to achieve sustainable development while observing environmental standards and significantly reducing environmental impacts. It has many significant benefits, including promoting economic growth opportunities, diversifying sources of production, alleviating poverty, and creating and expanding investment opportunities. As countries seek to improve the quality of life and the environment, many countries have recently started taking steps that would help them make the transition to green economy, including granting loans and offering tax breaks to sustainable transportation projects, adopting circular economy, growing use clean energy, and conducting sustainability-related research.
Locally, Egypt is seeking the implementation of green economy policies pursuant to Article 32 of Egypt’s constitution that provides for the preservation of natural resources and protection of rights of future generation. Besides the constitution, the environmental dimension hasn’t fell through the cracks of the 2030 Vision; rather, it has been included as a main dimension across all development sectors in ways that ensure safe, fair, and optimal use of natural resources protecting rights of future generations. Moreover, the political leadership have frequently instructed state institutions to focus on making the shift to green economy while taking into account the environmental dimensions of development projects.
Egypt’s steps toward green economy
Aiming to achieve sustainable development without causing environmental damage, Egypt moved to green economy by implementing several green projects, aimed at making use of renewable, clean, and efficient energy. To that end, 14 percent of the total public investments in the general budget of the year 2020-2021 has been allocated for these projects, with a total cost of EGP 447.3 billion bore to implement 691 green projects.
Till September 2020, Egypt had had a portfolio of green projects worth $1.9 billion, in fields of renewable energy, clean transportation, water and sanitation, and pollution control with 16, 19, 26, and 39 percentages, respectively. Below are the most notable procedures Egypt recently followed to make the transition to the green economy:
- International financing: Egypt issued $750 million worth of sovereign green bonds in global markets with five-year maturity, a step that qualified Egypt to be the first country in the Middle East and North Africa to have issued these bonds. This step was aimed at providing funding for eco-friendly projects, reducing the cost of funding on government securities, and encouraging clean-energy investments in the region.
- Renewable energy: The Benban Solar Park has been implemented with total investments of more than $2 billion, and a production capacity of 1,465 MW. Currently, Attaqa Power Plant, a pumped storage project for generating electricity, is being built with a total cost of $2.7 billion and a production capacity of 2,400 MW. Further, Egypt successfully received a LE 4.3 billion loan to build a wind power plant in the Gulf of Suez with a total production capacity of 250 MW.
- Transportation: Egypt has signed an agreement to implement the electric train project with a total cost of LE360 billion. The train is expected to serve 500,000 passengers daily. Furthermore, two monorail lines, that connect the New Administrative Capital and 6 October City to Greater Cairo, are being built with a total cost of €2.7 billion and are expected to serve 650,000 passengers daily.
A vehicle exchange and recycle plan is being implemented, in collaboration with the private sector, some commercial banks, and insurance companies, to facilitate the process of exchanging and recycling vehicles with the aim of increasing the number of vehicles run on natural gas.
- Water and sanitation: Egypt is expanding on sanitation coverage in villages and is going for expansions in wastewater treatment plants and sea water desalination, e.g. Bahr Al-Baqar wastewater treatment plant is being built with a total cost of $150 million and a production capacity of 150,000 m3 per a day.
- Reducing pollution: Between July 2014 and June 2020, Egypt has implemented a project for sustainable management of persistent organic pollutants in addition to other projects aimed at reducing the impact of climate change on different sectors and protecting the ozone layer with a total cost of $42.1 million.
The future of green economy in Egypt
- Developing green financing: That is the issuance of green bonds that support eco-friendly investments. Green bonds are issued to bring in funds that support climate and environment compatible development. Recently, there has been a global interest in green financing. Malaysia, for example, issued green bonds in a new move to finance environment-friendly projects including wind and solar power plants. Also, Arab countries are expected to turn to investing in green bonds including Dubai, for instance, which will be financing solar plants, biogas plants, and energy-efficient equipment. Likewise, Egypt is expected to increase green investments after signing the Marrakech Pledge for Fostering Green Capital Markets in Africa.
- Producing green hydrogen: Egypt is showing avid interest in “green hydrogen” technology to generate electric power for vehicles. In this context, the Egyptian prime minister had meetings with a number of Belgian companies to explore collaboration opportunities for producing green hydrogen.
- Boosting Egypt’s production of renewable energy: Increasing Egypt’s production of renewable energy, particularly wind and solar energy as part of Egypt’s plan to bring down electricity prices for consumers and manufacturers, is one way to support national economy. Moreover, Egypt is seeking to diversify energy resources making use of all the available resources targeting a total renewable energy production of 20 percent of the total energy production in 2022, expected to increase up to 42 percent in 2035.
- Expansion in the production of solar energy: The Ministry of Electricity is currently conducting negotiations with three consortia, namely, Siemens-Gamesa, Toyota-Orascom, and Engie- Al-Nowais- ITelagen on a project with a capacity of 1820 MW from solar energy besides negotiating with a consortium comprising of Engie- Al-Nowais- SkyPower on a project with a capacity of 750 MW of solar energy. The ministry has also installed 570 solar power stations on roofs of facilities of the Electricity Holding Company with a total capacity of 36 MW.
Requirements for transition to green economy
Based on the foregoing, the transition to green economy requires intensive efforts and collaboration on the part of all concerned parties in the following:
- Reviewing and reshaping government policies to motivate shifts in production, consumption and investment patterns.
- Focusing on rural development to alleviate poverty and increase resources.
- Giving due consideration to the water sector to control and rationalize water use, and prevent water pollution.
- Promoting sustainable investments in energy and energy efficiency.
- Compliance with the environmental requirements for construction, addressing the problem of waste, and encouraging recycling in an eco-friendly way.
- Consolidating bilateral or multilateral cooperation agreements and enhancing investment in capacity building to upgrade employee skills.
- Planning low emission development strategies for industrial development and adopting cleaner production technologies.