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Monday, 14 November 2022

Egypt launches guide for “Just Financing,” ADGM wants a piece of the regional carbon market, and more…

Egypt launches guide to “Just Financing”: Egypt’s International Cooperation Ministry launched the Sharm El Sheikh Guidebook for Just Financing (pdf) late last week in a bid to unlock private-sector climate finance, according to a ministry statement, in part by helping create a pipeline of bankable climate-friendly projects. Policymakers, development finance institutions, private-sector players and banks all had input into the creation of the guidebook, the ministry said.

The key takeaways:

  • Some USD 5.9 tn of the total USD 410 tn privately held global financial assets could provide the dry powder needed between now and 2030 to implement mitigation and adaptation measures in developing economies.
  • The collective funds of multilateral development banks, if pooled for climate action, would make up only 4% of what’s needed — meaning every country in the world needs the private sector to invest in climate-related projects.
  • Private capital often shies away from climate-friendly projects because of concerns about the risk-reward equation, so lowering risks associated with investing in climate projects is crucial, including mobilizing concessional capital.
  • The framework outlines how to increase investment quality in developing nations by offering more equity and local currency debt — instead of hard currency debt — to increase debt sustainability.
  • Governments need to work with other stakeholders to help identify and prioritize climate investment needs, along with existing technical and financial gaps to improve transparency and accountability in their planning, reporting and communication.


The UAE’s Abu Dhabi Global Market (ADGM) is set to launch a voluntary carbon market “in a matter of weeks,” head of sustainable finance Mercedes Vela Monserrate said, according to Bloomberg. The platform will be operated by Singapore-based digital exchange AirCarbon; several high-profile financial institutions and commodities firms will participate, Monserrate reportedly said.

Egypt and Saudi Arabia are doing the same: ADGM joins competitors from Egypt and Saudi Arabia in pushing into the market for the trading of voluntary carbon credits.

Are ADGM green bond issuances also in the works? ADGM is working with other UAE authorities to standardize and clarify requirements for ESG funding tools — like green bonds, Monserrate said. This could lead to the issuance of green bonds on the ADGM from 2023, she added.

ADGM also put forward a sustainable finance regulatory framework: The financial center published a proposed sustainable finance regulatory framework last week to support UAE’s net zero goals, according to a statement. The framework aims to build a sustainable finance hub to support the goals through investment funds, bonds, and managed portfolios.


The US-UAE Agriculture Innovation Mission for Climate (AIM for Climate) doubled its investment commitments to USD 8 bn and increased the scope of its partnerships since its COP26 launch, it announced in a statement (pdf) on Friday. The initiative aims to “significantly increase” investment and support for climate-smart agriculture and innovation in food systems from 2021-2025, its website notes.

IRENA closer to securing USD 1 bn for renewables: The International Renewable Energy Agency’s (IRENA) closed in on its USD 1 bn funding goal for its Energy Transition Accelerator Financing (ETAF) platform as three new partners joined, according to a statement. The Asian Infrastructure Investment Bank (AIIB), UAE’s Masdar, and reins. company Swiss Re all made commitments to contribute to renewable energy projects in developing markets through ETAF, which was launched at COP26 with USD 400 mn from anchor investor Abu Dhabi Fund for Development.

How much are we talking about? AIIB wants to deploy USD 300 mn, Masdar is potentially investing up to USD 200 mn, and reins. company Swiss Re will provide ins. solutions and risk insights to “help de-risk these critical investments,” the statement said.

The Inter-American Development Bank (IDB) is also weighing partnering up with ETAF and will aim to co-finance up to USD 100 mn of renewable energy and decarbonization tech projects in Latin America and the Caribbean, the statement noted.


Egypt raised another c.USD 1.8 bn for its energy transition in just a few days: The US and Europe pledged USD 550 mn to help Egypt decarbonize its power infrastructure and install new renewable energy capacity.

How it breaks down:

  • Our friends at EBRD have committed USD 1.3 bn including “USD 1 bn of private renewable finance, USD 300 mn in sovereign finance and grants of USD 3 mn from its shareholder special fund,” the bank confirmed on Friday.
  • The US and Germany agreed to provide over USD 250 mn for the energy pillar of Egypt’s newly-launched Nexus on Water, Food and Energy (NWFE) initiative, the two said (pdf) on Friday.
  • More than USD 300 mn in grant and concessional finance will come from the European Commission, France, the Netherlands, Denmark, and the UK, as well as donors to the EBRD’s High Impact Partnership on Climate Action.

International partners want to help accelerate Egypt’s energy transition: Egypt has “agreed to quadruple [its] deployment rate and reflect that in a revised NDC,” US climate envoy John Kerry was quoted as saying in the EBRD statement. Egypt will submit a revised NDC by June 2023, and may also commit to a net-zero emissions target, while upping the use of zero-emission vehicles and sustainable public transport, EnterpriseAM reported yesterday.

The USD 1.8 bn figure doesn’t include whatever is earmarked for Egypt by the World Bank’s CIF from some USD 350 mn it has now put aside to invest in sustainable agriculture in emerging markets. Egypt is the only country in MENA participating in the first tranche of funding from CIF, with Kenya, Tanzania, the Dominican Republic and Fiji also listed as beneficiaries, according to a statement.


Also worth knowing about this morning:

  • Our friends at the UAE’s Mashreq Bank plans to increase its sustainable financing to USD 30 bn by 2030, senior executive VP Tarek El Nahas told Arab News, the outlet reported on Thursday.
  • Move over Global Shield — there’s a new financing facility in town: More than 85 African ins. companies have joined forces to create The African Climate Risk Facility (ACRF) to underwrite USD 14 bn of cover for climate risk by 2030, according to a joint statement. ACRF will provide protection for 1.4 bn people on the continent against climate disasters like floods, droughts and tropical cyclones.
  • USD 20 mn more green finance for Egypt from the EBRD: The EBRD and EU signed an agreement with QNB Al Ahli under the Green Economy Financing Facility to provide on-lending for youth-led green MSMEs, it said in a statement on Friday.
  • USAID committed an initial USD 15 mn to an initiative designed to conserve Egypt’s Red Sea coast, with a target of raising another USD 35 from other donors and private businesses, it announced in a statement on Tuesday.

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