Dr. Mohamed Farid:
- Egypt is transitioning from conceptual discussions to full institutional implementation of sustainable finance frameworks
- Egypt has implemented a comprehensive package of reforms in both the banking and non-banking financial sectors, marking a qualitative leap in sustainable finance issuances
- The Financial Regulatory Authority mandates non-banking institutions to measure their carbon footprint and offset 20% of emissions annually through carbon credits
- Establishing a carbon emissions database has enhanced the precision of green finance allocation
- The objective is to mainstream sustainability concepts across all financial institutions
Within the context of accelerating the transition toward a green economy and reinforcing Egypt’s position as a regional hub for sustainable finance, Dr. Mohamed Farid, Minister of Investment and Foreign Trade, participated in the International Finance Corporation (IFC) conference titled “Innovation for Resilience: Finance for a Sustainable Future.” The event was attended by Mr. Hassan Abdalla, Governor of the Central Bank of Egypt; Mr. Ethiopis Tafara, IFC Vice President for Africa; Mr. Jürgen Schulz, German Ambassador to Cairo; and Mr. Olayemi Cardoso, Governor of the Central Bank of Nigeria.
The Minister affirmed that Egypt has moved from the theoretical introduction of sustainability concepts to institutional implementation supported by clear legislative and regulatory frameworks, enabling the market to attract sustainable financing and enhancing international investor confidence in the Egyptian economy’s ability to adopt green growth standards.
Dr. Farid stated: “Egypt has implemented an integrated package of structural reforms in the financial sector—both banking and non-banking—in cooperation with the Central Bank of Egypt and the Financial Regulatory Authority. This has led to a qualitative transformation in the environment for issuing sustainable financial instruments and increased the market’s capacity to attract international investments.” He added that these progressive reforms have opened new horizons for financing sustainable development projects.
The Minister noted that the true starting point for sustainable finance was the establishment of precise regulatory and legislative frameworks governing the issuance of sustainability-linked debt instruments. This includes clear definitions and classifications within the executive regulations of the Capital Market Law, covering green bonds, transition bonds, social bonds, and other instruments, thereby enabling multiple issuances by financial institutions and banks operating in the market.
He further explained that building a comprehensive and accurate carbon emissions database has been a cornerstone in developing the sustainable finance ecosystem. Clear disclosure requirements related to sustainability standards and carbon footprints have been introduced, based on the principle that “what cannot be measured cannot be managed,” ensuring more efficient allocation of green finance in line with actual market needs and development priorities.
The Minister also highlighted that the Financial Regulatory Authority has issued decrees mandating non-banking financial institutions with capital exceeding EGP 100 million to prepare periodic reports measuring their carbon footprint, and to offset approximately 20% of their emissions annually through the purchase of tradable carbon credits within the carbon market. This reflects a clear direction toward integrating environmental considerations into the core of financial and investment activities and advancing the transition toward a low-emissions economy.
Dr. Farid indicated that the current phase aims to expand the application of sustainability concepts across companies and institutions, while adhering to the principle of proportionality—where disclosure requirements are more stringent for larger-capital entities—in line with international standards, particularly IFRS Sustainability Standards S1 and S2. He emphasized the pivotal role of both banking and non-banking financial sectors in financing companies and supporting their transition toward more sustainable practices.
He added that the voluntary carbon credit system recently launched has witnessed notable progress, with approximately 160,000 carbon credits registered to date, alongside the completion of regulatory and accounting frameworks governing registration and trading processes. This paves the way for a new phase of expansion in financing sustainability projects.
The Minister concluded by underscoring the importance of strengthening regional and international cooperation in sustainable finance, commending the role of the International Finance Corporation in supporting developing countries, and expressing appreciation for the organization of this event, which brings together policymakers and financial institutions to explore innovative financing mechanisms for a more sustainable and resilient economic future.
