The Central Bank of Egypt (CBE) has announced that it will allow the establishment of green banks in the country, as part of its efforts to support sustainable development and environmental protection.
Green banks are financial institutions that specialize in providing low-cost financing for clean and renewable energy projects, as well as other initiatives that aim to improve environmental quality.
According to the CBE’s financial stability report, green banks will operate under the provisions of the Central Bank Law and the new banking system, which enable the licensing of new types of banks.
The CBE said that it supports the state’s efforts to provide sustainable financing, which is considered low-risk and beneficial for the stability of the financial system. Sustainable financing also enhances investment opportunities and attracts foreign currency, by appealing to a new segment of investors who are interested in environmental and social issues.
The CBE added that sustainable financing is a key factor in achieving the goals of sustainable development, which include creating balanced growth, reducing poverty, improving living conditions, and addressing climate change.
The CBE issued the guiding principles for sustainable finance to set the general framework for integrating environmental, social, and governance elements into the operations and decisions of the Egyptian banking sector. These principles are in line with Egypt’s Vision 2030 and the global Sustainable Development Goals.
The CBE also launched several initiatives to promote sustainable financing, by providing funds to banks at low interest rates to lend to their customers for various development projects.
The Egyptian banking market is currently implementing the first step of the road map for sustainable finance, which involves building the capabilities of the banking sector through training programs and papers.
CBE also directed banks to measure the carbon footprint of their internal activities as a first step towards applying sustainability principles to the bank’s internal activities and work.