The German Development Bank (KfW) has signed a debt swap agreement with Egypt’s Ministries of International Cooperation and Electricity and Renewable Energy, as well as the Central Bank of Egypt. The agreement, worth €54 million, relieves Egypt from paying this debt and allocates the funds to finance the country’s transition to green energy.
The debt swap agreement is part of Germany’s commitment, made during the COP27 Climate Change Conference, to support Egypt’s Nexus on Water, Food, and Energy initiative. Germany has provided a financing package of over €250 million, which includes debt forgiveness, grants, and soft loans, to contribute to Egypt’s energy goals. The current debt swap specifically aims to help Egypt achieve its target of generating 42% of electricity from renewable sources by 2030 by financing investments in the development of the transmission network.
The project will focus on strengthening the transmission network to integrate renewable energies, including the construction of two substations and the connection of two 500-megawatt wind farms to the national transmission network. The implementation of the project will be carried out by the Egyptian Electricity Transmission Company.
German Ambassador to Cairo, Frank Hartmann, expressed satisfaction with the debt swap arrangement, highlighting its support for Egypt’s energy transition. He emphasized the importance of new investments in energy infrastructure and their role in creating a sustainable future for all Egyptians. The fulfilment of Germany’s commitment to contribute more than €250 million demonstrates its dedication to supporting Egypt’s green initiatives.