The People and Banks Conference, held on Wednesday under the title “The Road to Sustainability and the Green Economy,” featured several banking leaders who highlighted the vital role of the Egyptian banking sector in achieving the state’s vision of transitioning to a green economy. The conference, organized by the Arab Media Center, tackled various economic issues, such as sustainable and green financing, digital transformation, small and medium-sized enterprises, local industry, and artificial intelligence.
Hisham Okasha, Chairperson of the National Bank of Egypt, said that the Central Bank of Egypt has issued mandatory instructions for banks to adopt sustainable financing practices, which are essential for addressing environmental risks and advancing the green economy. He also mentioned that developing countries need about $70bn for adaptation-focused financing, which could rise to $500bn by 2030. Moreover, he said that achieving carbon neutrality goals would cost around $4trn by 2050. He praised Egypt’s efforts to reduce carbon emissions and increase the share of renewable energy to 42% of energy production.
Mohamed El-Etreby, Chairperson of Banque Misr and President of the Federation of Egyptian Banks (FEB) and the Union of Arab Banks, said that the Egyptian banking sector has undergone a significant transformation in recent years, responding to technological changes and international banking standards. He added that banks have established sustainability sectors that follow the regulatory and legislative frameworks issued by the Central Bank, which take into account environmental, social, and governance criteria in financing projects and internal operations, in alignment with Egypt’s Vision 2030.
El-Etreby also said that FEB has established a Sustainable Finance Committee, which aims to enhance FEB’s role in putting Egypt on the map of leading countries in sustainable finance. He noted that the committee has successfully coordinated with the International Finance Corporation to hold workshops and trainings on sustainable finance strategy and environmental and social management systems for banking professionals.
El-Etreby explained that Egyptian banks have succeeded in mobilizing financial resources and financing sustainable development projects by exploring new investment opportunities and improving the efficiency of investment allocation according to current priorities. They have also adopted various financial mechanisms and programmes, as well as proposed financial alternatives and innovative solutions for development financing.
He added that this is in cooperation with the Egyptian government, which gives great importance to financing green projects. He pointed out that Egypt has a portfolio of eligible green projects worth about $1.9bn, distributed among renewable energy, clean transportation, sustainable water and sanitation management, and pollution reduction and control. There is a state direction to increase green investments to about 50% in the fiscal year 2024/2025, as green projects topped the list of targeted projects in Egypt, affirming that this is an opportune time for the banking sector and the private sector to participate in financing these projects.
Tarek Fayed, Chairperson and CEO of Banque du Caire, said that Egypt has launched many initiatives as part of its green transformation strategy. One of them is allocating 15% of its investments to the green economy, and the government aims to increase that percentage to 50% by 2050. He added that these initiatives reflect the state’s interest in renewable energy projects.
He also said that the Egyptian Central Bank’s guidelines on sustainable finance, issued in 2022, are an effective step to enhance the role of the banking sector in achieving the state’s vision and driving the transition towards the green economy. He said that this would help address environmental and social risks, in line with the national direction to achieve sustainable development goals according to Egypt’s Vision 2030. He stressed the importance of sustainable finance in supporting financial and banking stability.
Hassan Ghanem, CEO and Managing Director of the Housing and Development Bank, said that the bank has actively participated in supporting green economy projects by offering financing worth EGP 2.5bn to large and medium-sized companies.
Ghanem pointed out that the agricultural sector has received the largest share of sustainable financing, followed by the healthcare sector. He affirmed that the banking sector has played a significant role in promoting sustainable development and the green economy, as the Central Bank has set guidelines for directing financing to more sustainable economic activities. He said that this has had a positive impact on companies, attracting foreign companies and foreign direct investments.
Alaa Farouk, Chairperson of the Agricultural Bank of Egypt, stated that the bank’s policy is based on sustainability. He noted that the bank has 1,100 branches serving customers in villages and hamlets.
Farouk noted that the bank has increased its portfolio size for green financing from EGP 5bn to EGP 8bn for individuals, and has launched loans to support farmers at an interest rate of 5%. He said that the bank’s credit portfolio has increased from EGP 33bn to EGP 73bn, with over 80% of it directed to agricultural financing.
He affirmed that the bank supports modern irrigation projects and increasing per-acre productivity, which aims to achieve productivity between 40 to 60 percent. Farouk also mentioned that the bank has expanded its directed financing for renewable energy, injecting EGP 100m to 343 clients. He added that the bank has allocated EGP 1.04bn to support projects for the transition to modern irrigation for about 573,000 feddan.
He added that the bank has allocated up to EGP 170m to finance the first smart village with an area of 170 feddan, and has provided green financing worth EGP 300m to 780 clients.
Yehia Abou El-Fotouh, Deputy Chairperson of the National Bank of Egypt, said that the banking sector has played a vital role in the process of transitioning to a green economy and sustainable financing.
He explained that sustainability cannot be achieved without the banking sector, which directs financing to environmentally friendly green projects. He affirmed that many banks have focused on implementing sustainability principles in all sectors and issuing comprehensive sustainability reports.
He pointed out that the National Bank of Egypt has issued a carbon and environmental footprint report, a social impact report, and a responsible banking report.
Muawia Al-Saqali, Executive Director of Commercial International Bank (CIB), said that the bank’s strategy for financing sustainability lies in developing a sustainable economy and combating climate change.
Al-Saqali added that the bank follows a responsible financing policy that targets the green economy by converting the bank’s buildings into green buildings in line with sustainability standards, noting that the bank is the first bank in Africa to receive accreditation from the United Nations Green Finance Fund within the continent of Africa.
