The European Bank for Reconstruction and Development (EBRD) is boosting small businesses and green investments in Egypt with a US$ 50 million loan to QNB ALAHLI, one of Egypt’s largest commercial banks.
The loan, which includes US$ 7.5 million of concessional finance from the Green Climate Fund, will be used for on-lending to households and local small and medium-sized enterprises (SMEs).
The European Union (EU) will support the financing to QNB ALAHLI with up to €5.128 million of EU funds for incentive payments to projects that are successfully implemented and verified. The EU will also provide a comprehensive technical assistance package of up to €6.2 million for all participating financial institutions and their clients, as well as for policy dialogue.
QNB ALAHLI is the first bank in Egypt to benefit from a loan under the GCF GEFF Regional Egypt Framework, the second Green Economy Financing Facility (GEFF II) in the country. To date, the cooperation between the EBRD and QNB ALAHLI on various projects is worth more than US$ 720 million cumulatively, and has a special focus on SMEs, women-led businesses and green financing.
QNB ALAHLI will extend the EBRD’s financing to private sub-borrowers, including individual households and SMEs, operating in the residential, agribusiness, industrial, commercial and service sectors, who are developing green, energy efficiency, water efficiency, renewable energy and resource efficiency projects. This will promote the use of high-performance technologies and services in climate-mitigation and climate-adaptation activities, and will help with the transition to a greener economy. In Egypt and the southern and eastern Mediterranean region, it is the first programme of this kind to have both a retail and a residential segment.
Heike Harmgart, EBRD Managing Director for the southern and eastern Mediterranean, said: “We are very happy to roll out GEFF II in Egypt with the EU and GCF’s support to promote green investments, in line with our Green Economy Transition strategy. Through our partnership with QNB ALAHLI we have been able to support small businesses and trade and to increase finance for greener projects.”
Mohamed El Dib, Chairman and Managing Director of QNB ALAHLI, said: “It gives us great pleasure to cooperate with the EBRD in this remarkable transaction, which is in line with our ambitions to support Egypt’s business and social communities and its economic development, with particular emphasis on the development of the SME and retail segments, as well as the promotion of a greener economy. We look forward to further strengthening this partnership to meet our mutual objectives to serve economic, social and environmental well-being.”
Egypt is a founding member of the EBRD. Since the start of its operations there in 2012, the Bank has invested more than €7.7 billion in 132 projects in the country. The EBRD’s areas of investment include the financial sector, agribusiness, manufacturing and services, as well as infrastructure projects such as power, municipal water and wastewater services, and contributions to the upgrade of transport services.
By Nibal Zgheib