Egypt’s Minister of Finance Mohamed Maait has announced a series of climate-friendly measures aimed at fostering a green economy. These include tax exemptions of 33% to 55% for income from green hydrogen projects initiated within the next five years.
Additionally, production equipment, machinery, and raw materials for these projects will be exempt from value-added tax. The government is also committed to increasing the use of green financing tools, to direct 50% of government investments towards environmentally sustainable projects.
Maait underscored Egypt’s commitment to green initiatives such as the “Nove” initiative, which focuses on financing for food security, clean energy transition, and water sector development. To diversify sustainable financing, Egypt has issued “panda” bonds worth CNY 3.5bn in the Chinese market and “samurai” bonds totaling JPY 75bn in the Japanese market, earmarked for eco-friendly investments. Furthermore, Egypt has secured approximately $1.5bn in financing from international institutions, supporting the nation’s climate change goals amidst global economic challenges.
The Minister highlighted the establishment of a high-level investment council, presided over by the President, to ensure a steady flow of sustainable investments.
At the COP 28 climate conference in Dubai, Maait discussed the need for a reformed global financial structure to support green financing, in line with international trends and the growth of emerging markets. He emphasized the importance of private sector engagement in development projects and the necessity of attracting foreign direct investments to Africa, particularly to overcome energy access challenges.
Maait also addressed the decline in FDI to Africa by 66% in 2022, attributing it to global uncertainties. He pointed out that Africa requires annual investments of over $277bn to meet its 2030 climate objectives, yet current investments stand at only $30bn. This shortfall highlights the urgent need for increased climate financing and the economic implications of the green transformation.
Lastly, the Minister stressed the importance of continental integration to mitigate external economic shocks and fulfill climate adaptation needs. This involves developing adaptable infrastructure to support free trade agreements and boost intra-African trade.
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