Egypt signed on Sunday a €54 million debt swap agreement with the German Development Bank (KfW), on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), to finance Egypt’s transition to green energy, according to the German embassy in Cairo.
Signing from the Egyptian side was the Ministry of International Cooperation, Ministry of Electricity and Renewable Energy and the Central Bank of Egypt.
Under the agreement, Egypt will be exempted from repaying debts amounting to €54 million and will direct the amount into new green projects.
The debt swap will help the Egyptian government achieve its goal of producing 42 percent of its electricity from renewable sources by 2030.
“The purpose of the project is to develop a transmission network for integrating renewable energies into the electricity grid and enhancing its capacity,” the embassy said.
They pointed specifically to the construction of two sub-stations and the connection of two wind farms (Amunet and Red Sea Wind Farm) with a capacity of 500 megawatts each to the national transmission network.
The project will be implemented in collaboration with the Egyptian Electricity Transmission Company, the embassy said.
The embassy pointed out that the German government also pledged during the 27th UN Climate Change Conference (COP27) in Sharm El-Sheikh in November 2022 to contribute significantly to Egypt’s Nexus on Water, Energy and Food (NWFE) programme.
“In line with this commitment, Germany provided a funding package of over €250 million for the same purpose, including debt relief, grants and highly concessional loans,” the statement reads.