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German debt-swap of 54 million Euro fosters green energy transition in Egypt

26.06.2023 - Pressemitteilung
Logos: German Cooperation / KfW
Logos: German Cooperation / KfW© German Embassy Cairo

On behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), the German Development Bank (KfW) signed today a debt-swap agreement of 54 million Euro with the Ministry of International Cooperation, the Ministry of Electricity and Renewable Energy, and the Central Bank of Egypt. The agreement reliefs Egypt from the repayment of debts of 54 million Euro in order toutilize them to finance the green energy transition in Egypt instead.

During COP27 in Sharm El-Sheikh in Nov. 2022, the Government of Germany committed to contribute substantially to Egypt’s Country initiative „Nexus Water Food Energy – Energy Pillar“ („NWFE-EP“). Along the same event, Germany offered an overall financing envelop of more than 250 million Euro -for the same purpose- that include debt relief, grants, and highly concessional loans. The current debt swap will support the Government of Egypt in achieving its goal of 42% renewables by 2030, by financing investments that pave the way for this important initiative.

The purpose of the project is to upgrade the transmission network for the integration of renewable energies into the electricity transmission grid and reinforcement of the network. Particularly, the project contributes to the construction of two substations and the connection of 2 windfarms („Amunet“ and Red Sea Wind Farm„) with a capacity of 500 MW each to the national transmission grid.

The Egyptian population and economy will thus have access to an improved, cost-effective and reliable energy supply and with optimally integrated renewable energy. The project will be implemented by the Egyptian Electricity Transmission Company.

Ambassador Hartmann said in this context: We are happy to support Egypt on its way to energy transition through this dept swap. It will allow new investments into energy infrastructure and pave the way towards a green livable future for all Egyptians. I am happy that the commitment which was given at COP 27 for our overall contribution of more than 25o mio. € could finally be implemented.“

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