IFC Invests More Than Half a Billion Dollars to Advance Egypt's Green Transition and Support Small Businesses

Cairo, Egypt, November 25, 2024 - IFC has announced $605 million in commitments to three projects that will support economic development in Egypt across key sectors including climate finance, sustainable tourism, and access to finance for micro, small, and medium-sized enterprises (MSMEs).

IFC's Vice President for Africa, Sérgio Pimenta, signed the three projects during a visit to Egypt to underscore IFC's commitment to supporting the country's economic development and its private sector. The three projects are:

· A $300 million investment in a bond from Arab African International Bank (AAIB), which is Egypt's first sustainability bond and the largest issued by a private bank in Africa. Investing alongside IFC are the European Bank for Reconstruction and Development (EBRD) and British International Investment (BII), each subscribing at $100 million. Three-quarters of the bond's proceeds are allocated to green financing, including industrial energy-efficiency, small-scale renewable energy projects, and green buildings. One quarter is to support social assets including inclusive finance and MSMEs.

· A $155 million loan for Orascom Development Egypt (ODE) to boost green tourism in Egypt by improving energy and water efficiency and reducing greenhouse gas (GHG) emissions at several hotels in El Gouna, along the Red Sea. The project will help reduce energy consumption at the hotels by up to 50 percent from non-renewable energy sources and water usage by at least 20 percent. The financing will also help ODE refinance a portion of its existing debt.

· A $150 million loan for Commercial International Bank (CIB) to strengthen the bank's capital position amid challenging macroeconomic conditions and help it deliver on its commitment to support micro, small, and medium-sized enterprises (MSMEs) in Egypt, including women-owned MSMEs. The financing will foster job creation, boost economic development, and help reduce the gender financing gap in Egypt.

"The scale and breadth of IFC's investments reflect the strength of our partnership with Egypt and our shared support for sustainable private sector development in the country," said Sérgio Pimenta, IFC's Vice President for Africa. "By further stimulating financial inclusion to Egyptian MSMEs and accelerating the country's transition to a greener economy, IFC is continuing its work to empower Egypt's private sector to contribute the country's full economic potential."

The three projects were signed during Pimenta's visit to Egypt, where he met with the Prime Minister H.E. Dr. Mostafa Madbouly; Egypt's Minister of Planning, Economic Development, and International Cooperation, Dr. Rania A. Al-Mashat; the Governor of the Central Bank of Egypt, Mr. Hassan Abdalla; and private sector partners.

"Egypt's vision to increase private sector participation in the economy is anchored in the power of partnerships, and IFC has been a steadfast partner in driving this ambition forward," said Dr. Rania Al-Mashat, Minister of Planning, Economic Development, and International Cooperation. "IFC's new investments reflect our shared commitment to fostering sustainable, inclusive economic growth while advancing Egypt's climate goals. By driving private capital into green finance, sustainable tourism, and MSME support, these projects underscore the critical role of private sector development in achieving a greener and more resilient future for Egypt."

"A dynamic financial sector is the cornerstone of robust, sustainable, private sector-led economic development," said Hassan Abdalla, Governor of the Central Bank of Egypt. "IFC's investments are a testament to the critical role of financial institutions in helping build a more sustainable and competitive financial ecosystem in Egypt."

The projects align with the World Bank Group's Country Partnership Framework for Egypt, which aims to create conditions for green, resilient, and inclusive development. They also support IFC's country strategy in Egypt, focusing on employment and inclusion through increased access to finance for the private sector and MSMEs.

Since beginning its operations in Egypt in 1975, IFC has invested and mobilized $9 billion in development projects in the country and has an active advisory portfolio amounting $24 million. IFC's private sector support in Egypt focuses on fintech, climate finance, manufacturing, infrastructure, renewable energy, healthcare, gender, and other sectors.