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Tuesday, 16 March 2021

Get on the green bandwagon

Egypt is encouraging non-banking financial players to go green with their investments: The Financial Regulatory Authority (FRA) officially rolled out its Regional Center for Sustainable Finance to encourage and facilitate sustainable investments, the regulator said in a statement on Sunday.

What will the center do? The center will support NBFS firms by providing third-party vetting and auditing to local companies to instil investor confidence when tapping regional markets, Sina Hbous, who is chairing the organization and heads the FRA’s sustainable development division, told us. It will also provide training programs, advisory and research services to companies, support issuance of green debt financing instruments, including green bonds, and will try to ensure that companies adhere to green financing requirements, she said.

An advisory committee of up to 13 members chaired by IMF Executive Director Mahmoud Mohieldin will be formed to propose the center’s policies, possible cooperation programs, in addition to exchanging experiences with local and global sustainable financing entities.

Among the committee’s members: CIB Chief Sustainability Officer Dalia Abdel Kader, Federation of Egyptian Industries senior advisor El Sayed Torky, and Hussein Abaza (the advisor to the planning and environment ministries, not the CIB CEO of the same name). Also on the committee: Institute of International Finance’s managing director of global policy initiatives Sonja Gibbs, acting head of the OECD’s financial markets division Robert Patalano, and UNCTAD’s investment and enterprise director, James Zhan.

The Regional Center for Sustainable Finance has been in the works for a while: The FRA had greenlit a proposal to set up the regional organization to promote green investment in Africa and the Middle East in 2019, with the aim of channeling global investment into environmentally-friendly projects in the new administrative capital and a replicating the success of major projects like the Benban solar park.

This comes as part of a drive to grow the green economy: The government said last October that it will invest EGP 36.7 bn in green projects during the current fiscal year, after issuing the region’s first USD 750 mn green bond issuance in a sale that was 5x oversubscribed. Some 30% of the state’s investment budget in the next fiscal year will be geared towards green projects, according to Planning Minister Hala El Said. But Egyptian companies’ sustainable practices still have a long way to go, with Egyptian companies making up only 4.5% of the Middle East’s first regional green index’s weighting on its launch last year.

Want more on the green economy? Look no further than our new industry vertical, Going Green, the inaugural issue of which you’ll find below.

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