Egypt and Germany Sign 50 Million Euro Debt Swap for Renewable Energy
Funds will support energy transition projects and expand solar and wind power plants to increase renewable energy’s share and reduce fossil fuel use.
Egypt and Germany have signed a debt swap agreement worth EUR 50 million between the two governments to finance energy transition projects and expand solar and wind power plants. The signing was witnessed by Mahmoud Essmat, Minister of Electricity and Renewable Energy, with the funding directed to support increasing the share of renewable energy in the electricity mix, reducing fossil fuel use, limiting carbon emissions, and preserving the environment.
Under the agreement, the EUR 50 million will be converted into a grant from the German government, with financing made available in two equal tranches of EUR 25 million each. The structure is designed as a debt swap arrangement, under which a portion of outstanding debt is converted into domestic investments or projects.
The debt swap mechanism serves as a tool to support and encourage economic and social development by redirecting debt obligations into locally executed initiatives. In this case, the funding is focused on energy transition priorities, including expanding the deployment of solar and wind power within Egypt’s electricity system.
