The International Finance Corporation (IFC) announced on Sunday it is partnering with Banque du Caire to develop a climate finance strategy that will help protect the bank from climate risks, invest in green activities. The partnership also aims to support the decarbonisation of Egypt’s economy.
With 95 percent of Egyptians living on roughly 5 percent of the country’s land near bodies of water, the North African country is highly vulnerable to the impacts of climate change including water scarcity, droughts, rising sea levels, and extreme weather.
To support the move to a greener, climate-resilient economy, the Egyptian government updated in June 2023 its Nationally Determined Contributions (NDCs) – the country’s self-defined national climate pledges – with an ambitious goal of lowering greenhouse gas emissions (GHG) by 37 percent by 2030.
IFC’s climate advisory project with Banque du Caire supports Egypt’s NDC goals by helping the bank increase its strategic exposure to projects that will eventually improve the country’s climate outlook.
As part of the project, IFC is set to conduct an internal assessment for Banque du Caire, review the bank’s portfolio of existing climate finance assets, and screen its portfolio against climate risks. The goal is to ultimately assist the bank in transforming its climate finance strategy into an actionable workplan, IFC said.
“Our strategy at Banque du Caire is to develop the instruments and tools that provide us with long-term sustainable growth and security. This new project we are embarking on marks a nexus point where all of our efforts, previous, current and moving forward connect to boost our sustainable transformation” said Tarek Fayed, Banque du Caire chairman and CEO.
Fayed added: “These new changes will showcase Banque du Caire’s ability to smoothly transition into the green economy, ensuring financial growth and profitability while protecting all that we hold dear to our hearts.”
“The project marks a significant step forward in Egypt’s efforts to address climate change,” Riadh Naouar, IFC Regional Manager for Financial Institutions Group Upstream and Advisory for North, Western, and Central Africa, said.
“By helping Banque du Caire develop a climate finance strategy, we are helping to ensure that the bank can meet the financing needs of its clients as they transition to a green economy.” Naouar stated.
Heidi El-Nahas, head of Corporate Communications and Sustainability at Banque du Caire, stressed the importance of the agreement in enhancing the bank’s steps in the field of sustainability, which the bank started since 2015.
“This cooperation is based on many pillars, which are based on promoting and consolidating the principles of sustainability within the bank’s internal policies and considering it to be a main pillar towards creating a unique business model for Banque du Caire in this field.” El-Nahas said.
Backed by the German Federal Ministry for Economic Affairs and Climate Action (BMWK), the project is part of IFC’s climate program, which aims to scale up private sector financing in the financial sector for climate mitigation and adaptation projects while helping mitigate climate risks.
Addressing climate change is a priority for the World Bank Group, which is committed to align 100 percent of all new financing operations with the Paris Agreement’s goals by 2025.
IFC has an investment portfolio amounting to around $1.6 billion and an active advisory portfolio of $33 million. IFC’s projects have supported the private sector in key areas such as access to finance, fintech, climate finance, manufacturing, infrastructure and renewable energy, healthcare, and gender inclusion.
