Sustainable development with global partners

Since the pandemic started in 2020, passing through the U.N.’s 27th Conference of the Parties (COP27) and the ongoing war in Ukraine, the government has focused on cooperating with international partners to ensure sustainable development that is also eco-friendly. “Since 2020, the international landscape has changed,” said Minister of International Cooperation Rania El Mashat on March 21 at the St. Regis Cairo Hotel. “That created technical and financial gaps.”

Mashat stressed that contrary to common perception, the financing that comes via the Ministry of International Cooperation goes to the government and private sector projects. Of the $30 billion in funding in 2021 and 2022, $7 billion went to private sector projects “through lines of credit from commercial banks, private equity and venture capital, direct loans at more favorable rates than the market.”

 “Both need to meet the [U.N.’s 2015 sustainable development goals] SDGs,” she said. “That means we must create a compelling story around each project for different international partners. [That story] must push SDGs in projects to the forefront.”

The first step is to “determine how much of the investment budget went to achieve which SDG,” Mashat said. “That helps international partners see how their investments contributed to which SDGs.”

Mashat stressed the government reassesses the nature of cooperation with multilateral partners every five years based on the state’s ever-changing investment needs. “In 2022, we finalized our strategy with the EBRD [European Bank for Reconstruction and Development]. In April, the minister said new strategies were finalized with the World Bank and U.N.

She emphasized the advantage of having a single ministry deal with all development and finance international partners (except the IMF, which deals with the Central Bank and Ministry of Finance) is that more than one can work on the same project. “It’s a testament to the size of our projects. It is not easy, as each development partner has its own charter and international rules, regulations and targets.”

Another plus to having a single ministry is that it prevents redundancies and ensures projects complement each other, creating a synergy.

Climate-driven opportunities

Mashat said opportunities for multilateral cooperation increased tremendously after Egypt assumed the presidency of the COP through  COP28 this year. “One key advantage is the narrative about climate action became more familiar within the government. That helped the private sector when communicating with the government about their needs to implement sustainable green projects.”

The other advantage of the COP presidency is Egypt has more clout to move from pledges to implementation and pass the loss and damage fund, where wealthy nations help low and middle-income countries overcome climate-related disasters.

In Egypt, that was evident in clean energy, water and food projects singled out from a list of adaptation and mitigation actions planned for 2050. “We now have one multilateral bank financing each one [of those three] sectors.”

Mashat talked about the Sharm El Sheikh Guidebook for Just Financing. “It asserts that development and green projects are not mutually exclusive,” she said. “In Egypt, climate projects also need to have a development aspect.”

Lastly, Mashat said money coming from international development partners, while cheap, is not easy as the government must abide by specific standards. “That money needs good governance, procurement and monitoring,” she said. “That makes it, in my view, smart money.”