Egypt—Transforming Financial Systems for Climate (TFSC)

The Arab Republic of Egypt is highly vulnerable to climate change and faces numerous threats to its economic, social, and environmental sustainability. The population increased from 36 million in 1973 to approximately 102 million by mid-2021. The demographic growth coupled with ambitious development and industrialization policies has put significant pressure on natural resources in the form of heavy air, water, and soil pollution. The magnitude of these environmental and social costs is likely to offset some of the economic growth gains. However, existing national strategies in Egypt reveal a remarkable awareness of the value of a “Green Transformation” to Egypt’s competitiveness and future development prospects.

The Transforming Financial Systems for Climate (TFSC) program is part of a global €653 million effort of the Agence Française de Développement Group and the Green Climate Fund to develop a market for climate finance in 17 countries across Africa and Latin America. The TFSC is supporting the National Bank of Egypt in developing its Climate Change Strategy and Environmental and Social Risk Management System.

The specific objectives of TFSC in Egypt are:

1. Support Egyptian financial institutions in adopting a climate finance strategy and tools.
2. Provide support for the promotion of green sustainable growth in different sectors, leveraging both public and private financing.
3. Consolidate the application of market-based instruments for environmental/climate-smart investments.
4. Improve the competitiveness and growth of cleaner business opportunities that lead to job creation.

Select Activities

• Assist the NBE in defining and implementing a climate finance strategy, including elaboration and implementation of a climate finance policy, integration of climate issues in internal procedures, reporting applications, capacity building activities, and GCF’s accreditation support.
• Assist in the management of environmental and social (E&S) risks, including support for the implementation of E&S risks management policy, procedures, tools and assessment, sector-specific guidelines definition, capacity building activities, and support to E&S due diligence on sub-projects.
• Support for the definition and implementation of a gender policy, including professional equality initial diagnosis, support to activities related to professional equality within the Bank, support to define a gender policy related to the investments, and capacity building.
• Support for the identification and development of eligible and bankable climate-related projects: feasibility study for developing climate-related projects, assessment of projects’ eligibility, monitoring and implementation of the AFD Group’s credit facility.
• Support for NBE’s marketing and communication strategy, including marketing and communication tools to brand, position, and promote the project and the eligible climate investments, awareness campaigns, and institutional relations.