Minister of International Cooperation Rania Al-Mashat and the Agence Française de Développement (AFD) have agreed on a grant worth EUR 151 mn (EGP 2.75 bn) for enhancing the Egyptian energy sector’s financial sustainability, governance, and operational efficiency, Invest-Gate reports.

Under the deal, inked on June 10, Egypt will receive “a credit facility of EUR 75 mn (EGP 1.36 bn) – the first of two equivalent credit facility operations, with the second one to be possibly approved later this year,” along with funding of EUR 1 mn (EGP 18.19 mn) for the deployment of effective and targeted technical assistance programs, AFD said in a press release on June 16. 

Coming as part of the Energy Sector Budgetary Support Program, “this Development Program Financing (DPF) aims to reinforce the design of effective policies, carried out by the Ministry of Electricity and Renewable Energy, which would curb dependence of the Egyptian economy on climate-harming fossil fuels and boost market penetration of renewable energies, with a strong focus on both economic and climate goals,” read the statement.

Equally noteworthy is the fact that the DPF is part of a multi-donor support program, in cooperation with the African Development Bank (AfDB) and the Japanese International Cooperation Agency (JICA), at estimated total financing of EUR 1 bn (EGP 18.19 bn).

Since 2014, Egypt has undertaken an ambitious reform for the modernization of its energy sector, providing the adoption of the 2035 Integrated Sustainable Energy Strategy – which entails: gradual phasing out of energy subsidy regime; diversification of electricity mix, with a growing share of renewables (42% by 2035); and, refined sectoral governance, with the liberalization of the electricity market and enforcement of energy efficiency as a cross-cutting objective.