COP27 was the standout story for the green economy in 2022, both here at home and abroad. In Part I of our Year in Review on the green economy, we took a look at how the impacts of climate change caused problems for livestock and bee farmers last year, as well as the fishing and tourism industries that depend on our Red Sea coral reef ecosystems. In brighter news, we also reviewed the forward strides taken this year for our electric-vehicle (EV) industry. This week, we recap the single most important climate event of 2022: the COP27 UN climate summit held in Sharm El Sheikh in November.

As COP hosts, Egypt helped broker a landmark agreement to compensate developing nations for climate losses: Negotiations ran into two days of overtime at COP, as delegates from nearly 200 countries struggled to close rifts between developed nations including the EU and the US, and other negotiators over key issues like emissions reduction, ongoing burning of fossil fuels and the 1.5C target. While some negotiators were disappointed that stronger commitments weren’t reached on mitigation, developing nations celebrated the signing of a first-of-its-kind agreement to create a loss and damage fund, helping the most vulnerable nations cope with climate disasters triggered by developed countries’ emissions.

The L&D agreement should see much-needed funds funneled to the frontlines of the climate crisis: The loss and damage agreement will see developed countries pledge funds to “save lives and livelihoods from climate change related disasters” in climate-affected countries. Key details over the fund, which includes how it will function, who will pay into it, what the funding will look like and who will be able to benefit from it, will still need to be ironed out. A transitional committee will be tasked to carry out the details for the historic fund next year, with the first meeting expected before the end of March 2023.

The summit was a major catalyst for our green hydrogen sector: The government and private-sector partners spent much of last year laying the groundwork to build an export-oriented, region-leading green hydrogen industry from scratch — and at COP, those efforts brought tangible progress. Egypt signed framework agreements at the summit with international power companies to construct nine green hydrogen and ammonia facilities in the Suez Canal Economic Zone — projects which, if they all go ahead, would collectively produce up to 7.6 mn tons of green ammonia and 2.7 mn tons of hydrogen a year when fully operational.

These hydrogen projects could send a flood of investment our way: The nine projects will need some USD 83 bn altogether to get them across the finish line.

The lights went on at our first green hydrogen facility in tandem with COP: Norway’s Scatec, Fertiglobe, Orascom Construction, and the SFE last month commissioned the first phase of their 100MW green hydrogen facility in Ain Sokhna. Once operational, the plant will have the capacity to produce up to 15k tons of green hydrogen as feedstock for up to 3 mn tons of ammonia annually.

And the hydrogen agreements signed at the summit were just the start: Seven further MoUs were signed between Egypt and consortiums earlier this month to conduct feasibility studies on new facilities to produce green hydrogen and its derivatives. And with the government expected to unveil its national hydrogen strategy any day now, we’re expecting that momentum in this nascent industry will only ramp up as 2023 gets underway.

COP breathed fresh life into our wind power sector: After an apparent pandemic-era slowdown in local renewable energy development, COP saw the wind sector come roaring back into action. The summit helped line up as much as 29.5 GW of new wind generation capacity worth up to USD 34 bn in less than two weeks. That’s nearly half of the country’s total current installed capacity, which stood at 59.5 GW at the end of last year. Among the mooted developments are two separate 10-GW wind farms that are set to be crowned among the world’s largest: one from our friends at Infinity Power and Hassan Allam Utilities together with long-time partner Masdar; and the other from Saudi renewable energy developer ACWA Power. The summit also saw a consortium of Orascom Construction, Toyota Tsusho and Engi break ground on their new 500 MW wind farm in Ras Ghareb.

Climate finance was another key issue at the Sharm El Sheikh summit, with the question of how to get the needed funding flowing to green projects in emerging markets taking top billing. Egypt stepped up as a model for developing nations using public and concessional funds to attract private investors — an approach often referred to as blended finance. The International Cooperation Ministry’s Sharm El Sheikh Guidebook to Just Financing, launched at COP, gives developing nations a roadmap on how to put the blended finance model into action. Meanwhile, our Nexus on Water, Food and Energy (NWFE) program will stand as a practical example on a nationwide scale. There was also progress on the carbon credits front, as the EGX unveiled a plan to set up a regional voluntary carbon market (VCM) for the first time in Africa.

NWFE will set the agenda for the national green transition in coming years: Egypt managed to land some USD 10.3 bn worth of climate funding agreements during COP for NWFE, which will see the government implement some USD 15 bn worth of projects to turbocharge the country’s green transition, including an energy project worth USD 10 bn and eight food security, agriculture, and irrigation and water projects.

Bilateral and multilateral financing agreements will go towards strategic projects aimed at unlocking private investment. In one example, the US, Germany, and other European countries pledged to provide more than USD 550 mn to help Egypt decarbonize its power infrastructure as part of the energy pillar of NWFE. This public money will go towards the unprofitable task of decommissioning some 5-GW of gas-fired power plants and strengthening the national grid, making space for private-sector players to invest to bring new wind and solar energy online.

And we’re getting more ambitious when it comes to emissions reductions targets: In return for the helping hand on NWFE from our US and European friends, Egypt has agreed to ramp up the rate at which we bring new renewables capacity to the grid from a current target of sourcing 42% of our energy from renewables by 2030. Look for the country to submit a revised nationally determined contribution (NDC) target in June, which will lay out fresh reduction goals for national greenhouse gas emissions. We’re also set to consider committing to a net zero greenhouse gas emissions target and expand the use of zero-emission vehicles and sustainable public transport.

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