Description
The study has been commissioned by GIZ, with a view to assisting the Egyptian Ministry of Industry and Foreign Trade (MTI), and the Egyptian-German Private Sector Development Programme (PSDP) on behalf of BMZ, to further promote green growth and green job creation in Egypt.
Green Growth Opportunities
and Requirements in Egypt
Karen Ellis, with inputs from Smita Nakhooda
published by:
Contents
Executive summary S. 4
Suggested priorities for MTI S. 8
1 Introduction and framework for the study S. 10
2 Renewable energy generation and renewable energy appliances S.12
2.1 The opportunity S. 12
2.2 Framework conditions S. 15
2.3 Policy recommendations and economic considerations S. 18
3 Construction Sector: Green Buildings S. 26
3.1 The opportunity S. 26
3.2 Framework conditions S. 26
3.3 Policy recommendations and economic considerations S. 30
4 Agricultural waste management S. 34
4.1 The opportunity S. 34
4.2 Framework conditions S. 37
4.3 Policy recommendations and economic considerations S. 39
5 Conclusions S. 44
References S. 46
Boxes
Box 1 Case study on PROSOL S. 20
Box 2 Top priorities for MTI to promote the renewable sector S. 25
Box 3 Case Study on Green Buildings S. 29
Box 4 Top priorities for MTI to promote the green construction industry S. 33
Box 5 Case study on converting agricultural waste S. 38
Box 6 Top priorities for MTI to promote the agricultural waste management industry S. 43
4
Executive summary
The team identifed three broad and inter-related sectors
of focus for this study: (1) Renewable energy generation
and renewable energy applications; (2) the construction
sector; and (3) the agricultural waste sector. These are
all areas which would generate signifcant potential for
green growth and jobs, if the right framework conditions
were put in place. This could be achieved largely through
private sector action, at limited cost to the taxpayer, if
the enabling conditions were put in place through an ap-
propriate policy framework and supportive institutional
environment.
In the renewable energy generation and appliances
section, the report discusses the potential for wind power
and solar power (photovoltaics, solar water heaters and
concentrated solar power), both of which have consid-
erable potential within Egypt due to its geographical
characteristics. The wind power sector is the most de-
veloped, and government policy is promoting this sector
most strongly. Solar water heaters also provide a signif-
cant opportunity within Egypt – a possible low hanging
fruit – linked to the construction of green buildings
and retroftting of existing buildings. Photovoltaics and
concentrated solar power applications are currently less
developed and further from achieving market viability.
Developing the renewables sector will be important for
Egypt’s energy security going forward, as the the coun-
try’s stock of fossil fuels is being depleted, and national
demand for energy is rising fast. It also holds the prom-
ise of generating many jobs, and becoming a lucrative
export market for Egypt.
The objective of this study is to identify the key
opportunities for green growth in Egypt, discuss the
framework conditions necessary for achieving them, and
make policy recommendations. Green growth opportu-
nities are defned as those which achieve the triple goals
of (i) economic growth, (ii) social inclusivity, and (iii)
environmental sustainability or improvement. The social
dimension is addressed by prioritising these opportu-
nities in terms of their potential to generate jobs, thus
allowing the benefts of these new opportunities to be
shared in a socially inclusive manner.
The study has been commissioned by GIZ, with a view to
assisting the Egyptian Ministry of Industry and Foreign
Trade (MTI), and the Egyptian-German Private Sector
Development Programme (PSDP) on behalf of BMZ, to
further promote green growth and green job creation in
Egypt.
The aim of the study was to identify a small number
of sectors where there are signifcant opportunities for
green growth and job creation, that can potentially be
achieved in a reasonably short time frame, and at rela-
tively low cost to the public budget. In other words, to
identify low hanging fruit, and explain in practical terms
how they can be harvested.
This is crucial given the current juncture within Egypt,
where public resources are very tight, and where employ-
ment generation is a priority for a transition government
facing enormous public pressure to deliver new polit-
ical freedoms and economic opportunities. Although
environmental concerns are not currently high on the
political agenda, and nor is there much awareness about
the problem amongst the public, it is nonetheless a seri-
ous looming problem that will need to be tackled within
Egypt sooner rather than later.
5 EXECUTIVE SUMMARY
The most obvious recommendation to support market
development in the renewables sector is the phased
reduction and removal of fossil fuel subsidies. However,
even in the absence or slow implementation of subsidy
reduction, it should be possible to make progress in de-
veloping the renewables sector, through improvements
in the enabling environment and other framework con-
ditions governing the sector. The proposed Unifed Elec-
tricity Law will help to create better framework condi-
tions in the sector to support private sector investment.
But what is ideally needed is a planned and determined
shift to renewable energy: a clear, long term, holistic
implementation plan for the development of the sector,
which gives consideration to private sector incentives,
likely developments in both domestic and international
demand for renewables, and technological innovation,
and which considers how the whole supply chain can be
developed to generate a competitive industry along with
broad based growth and job generation. Specifc recom-
mendations include:
1. Public education of benefts and public-private
dialogue in order to mobilise support for the required
transformation.
2. Use of economic incentives to stimulate private
investment e.g. procurement policies, differential
pricing and taxation to promote renewable technolo-
gies, fnancing mechanisms etc.
3. Use of licensing requirements for industrial energy
users to incentivise use of renewable energy.
4. Use of downstream regulation e.g. new building
codes, to incentivise or require use of technologies
such as solar water heaters (as discussed further in
the next section).
5. Investment in connections of renewable energy gen-
eration installations to the grid, potentially through
public / private partnerships.
6. In the longer term, investment in infrastructure to
facilitate the export of renewable energy.
7. Development of a clear regulatory framework for the
renewable energy industry.
8. Policies to promote local production of inputs for
renewable energy technologies.
9. Capacity building and development of the SME sec-
tor, and new fnancing mechanisms.
10. Increased funding and support for energy R&D, and
mechanisms to facilitate coordination and commer-
cialisation of R&D efforts.
11. Development of necessary skills and accredited train-
ing courses.
12. Accessing carbon market mechanisms such as the
Clean Development Mechanism.
In the section on the construction sector, the
focus is on green buildings, and the potentially large job
creation potential associated with green construction
and retroftting of existing buildings with energy eff-
cient appliances such as solar water heaters. Many of the
possible energy effciency improvements can quickly pay
for themselves in terms of reduced energy bills. However,
fossil fuel subsidies are again undermining incentives to
undertake green construction within Egypt. Nonetheless,
incentives for green construction could be created in
other ways. Specifc recommendations include:
1. The development of a green construction strategy, as
proposed in the Egyptian Competitiveness Report, by
convening public and private sector representatives
from the construction industry, to develop a plan
and establish the standards and incentives for green
construction.
6
2. The continuation / strengthening of the system of
progressive electricity tariffs dependent on relative
energy effciency, in order to incentivise energy eff-
ciency improvements. The introduction of a progres-
sive tariff for gas pricing also.
3. Enhancing enforcement of building codes and re-
viewing their achievability.
4. Performance ratings and labelling schemes, accom-
panied by a marketing drive and media campaign to
raise consumer awareness.
5. The introduction of fscal or other fnancial incen-
tives to incentivise energy effciency.
6. The introduction of energy effciency requirements
into Government procurement of construction
projects.
7. Working with fnancial institutions to improve access
to credit for the upfront costs of energy effciency
measures.
8. Market studies, demonstration projects and aware-
ness raising campaigns for both the industry and
consumers.
9. Incorporation of energy effciency into higher edu-
cation programmes and increased R&D expenditure
and network building between existing R&D players.
10. Working with the private sector to identify where
there are gaps in the availability of suitable materials
and technologies within Egypt.
11. Working with SMEs to help them comply with stan-
dards.
12. Investigating international sources of green climate
fnance that may help to underpin the necessary
investments.
In the section on agricultural waste management,
the report focuses on the potential to ameliorate one
of the most visible of Egypt’s environmental problems,
the ‘Black Cloud’ that engulfs much of Cairo at certain
times of year, as a result of the burning of agricultural
waste. There are multiple potential uses of this waste,
including conversion into energy in different forms, the
production of compost, the production of animal feed,
and as a substrate for the production of food crops such
as mushrooms, all of which could generate signifcant job
and export opportunities.
Once again, the most obvious way to create a more en-
abling environment for the development of the agricul-
tural waste sector would be to reduce energy and fuel
subsidies, and to a lesser extent fertiliser subsidies, which
would generate increased demand for alternative sources
of fuel, energy and compost, and thus stimulate demand
for agricultural waste as an input. Other recommenda-
tions include:
1. Enforcing more strictly the ban on the burning or
unauthorised dumping of agricultural waste, which
would increase the supply of the raw material.
2. Consideration of the optimal location and number
of authorised dumpsites and exploration of differ-
ent models of public and private provision of these
dumpsites, and associated economic incentives.
3. Pilot projects to explore the fnancial viability of the
different potential uses of agricultural waste, and a
more coordinated approach to investment in pilot
projects.
4. Investment in R&D, and promotion of networks and
linkages to facilitate commercialisation.
5. Assessment of the potential to access different forms
of climate fnance for such projects.
7 EXECUTIVE SUMMARY
6. Research, data gathering, and analysis, in order to
inform the development of a strategy.
7. Feasibility studies, investigation of export markets
and matchmaking between market participants.
8. Discussion with market players to identify skills gaps
and ways to plug them.
Suggested priorities for MTI specifcally, are listed in the
box below.
Generally speaking, in order to encourage green
growth across all relevant sectors, the frst priority is to
create the incentives that will motivate private invest-
ment, and make it fnancially viable, which can either
be through the removal of disincentives (e.g. fossil fuel
subsidies), through explicit public funding, or through
innovative use of ‘carrots’ to reward businesses demon-
strating appropriate behaviours (which are better than
‘sticks’ which are harder to enforce). In parallel to this,
there is a strong need within the Egyptian context to
raise awareness amongst the public and business sector,
about both the environmental costs of ‘business as usual’,
and the potential market opportunities and fnancial,
economic and social benefts of new green solutions and
technologies. Thus there is a need for education and me-
dia campaigns, consultation processes, public / private
dialogue, and civil society engagement strategies.
Once demand and awareness has been created, the
priority will switch to building local capacity and skills in
order to overcome any supply constraints and thus max-
imise the benefts to Egypt in terms of growth opportu-
nities and job creation. However, where market demand
is strong, private players may be expected to begin to
respond in a more concerted way, thus ameliorating
some of these supply side constraints themselves.
A coherent, joined up government strategy is ideally
needed to achieve these objectives most effectively, set-
ting out a clear vision for the future, and an action plan
specifying the targets, timeframes, resources, responsi-
bilities (incl. public sector vs. private sector), and success
indicators.
To conclude, there is signifcant potential to achieve
green growth in a number of sectors within Egypt. How-
ever, the current political uncertainty is an enormous
disincentive to private investment, so the sooner greater
clarity is achieved on the future Government’s econom-
ic stance and policy direction, the better. However, it is
clear that environmental issues are not currently top of
the political agenda within Egypt, and public awareness
of the impending problems is very limited. Nonetheless,
once Egypt has a new Government in place, perhaps
with a much stronger mandate to make transformational
changes, the potential to make progress on these issues
may be stronger than it has ever been before.
8
Renewables sector
Long term goals
• Push for: fossil fuel subsidy removal; implementa-
tion of the National Electricity Law; improved regu-
latory framework for renewables; and development
of a cross-Ministerial strategy to develop the sector.
• Explore public/private partnership framework to
invest in connections of renewable energy genera-
tion installations to the grid.
Potential quick wins
• Take steps to reduce disincentives for foreign
investment in renewables incl. speeding up the
investment process, creating a one stop shop for
potential investors, and signalling welcome to
foreign investors.
• Introduce licensing requirements or ‘carrots’ for
industrial energy users to incentivise use of renew-
able energy.
• Undertake awareness raising activities, develop
quality standards, and support the provision of
accompanying training for local SMEs so they can
better serve domestic renewables industry.
Suggested priorities for MTI
Green construction sector
Long term goals
• Push to build on current dialogue approaches pur-
sued by EGBC, in order to develop a green construc-
tion strategy, review and adjust existing standards,
strengthen enforcement, and develop performance
rating / labelling schemes.
• Work with the private sector to identify where there
are gaps in the availability of suitable materials and
technologies within Egypt, and explore the possibil-
ity to promote the development of these industries
locally.
Potential quick wins
• Work with fnancial institutions to improve access
to credit for the upfront costs of energy effciency
measures, or to provide subsidised credit pro-
grammes or credit guarantee schemes.
• Work through schemes designed to support SMEs
and professionals involved in the sector, to raise
awareness of market opportunities and build rele-
vant skills and capacity, including helping SMEs to
comply with standards.
9
Suggested priorities for MTI
Agricultural waste management
industry
Long term strategies
• Through dialogue with the private sector, analyse
industrial and trading opportunities arising from ag-
ricultural waste, and undertake market assessment
/ feasibility studies to understand the opportunities
and constraints.
• Work with other government departments in-
cluding MALR to tackle these constraints, identify
priority areas for reform and support, and develop
an institutional and regulatory framework that
effectively underpins market development.
• Establish a network of relevant stakeholders,
including the agribusiness industry, to discuss and
develop a strategy for the sector, and to make link-
ages between different parts of the supply chain, in
order to stimulate market development.
Potential quick wins
• Through public-private dialogue, explore the feasi-
bility of creating incentives for private developers to
establish private waste management plants.
• Establish a communication strategy and action plan
to raise awareness and community participation in
existing market opportunities.
EXECUTIVE SUMMARY
10
The objective of this study is to identify the key opportu-
nities for green growth in Egypt, discuss the framework
conditions necessary for achieving them, and make policy
recommendations.
Green growth opportunities are defned as those which
achieve the triple goals of (i) economic growth, (ii) so-
cial inclusivity, and (iii) environmental sustainability or
improvement. Green growth is often construed as a more
positive agenda than sustainable development, as it focuses
attention less on the trade-off between economic and en-
vironmental goals, and more on the economic opportuni-
ties that are generated by efforts to improve environmental
performance. It seems likely that there will sometimes be
trade-offs between economic and environmental goals, but
that there will also be many occasions when these goals
will be mutually consistent and reinforcing. These will be
defned as ‘green growth opportunities’ for the purposes of
this study. The social dimension is addressed by prioritising
these opportunities in terms of their potential to generate
jobs, thus allowing the benefts of these new opportunities
to be shared in a socially inclusive manner.
It is often argued that achieving green growth requires
transformative change in the way that economies are run
– a signifcant departure from ‘business as usual’. In other
words, the concept and objective of green growth needs to
be ‘mainstreamed’ into all aspects of economic policymak-
ing. It also requires that the private sector itself recognises
(i) the threats to their existing business models posed by
environmental challenges, and (ii) the new market oppor-
tunities and scope to achieve improved competitiveness
associated by investing in new ‘greener’ business models
and technologies. It is argued that if the private sector in
a particular country does not respond to these risks and
opportunities, perhaps because of lack of awareness or
capacity, it will be competitively disadvantaged in the long
term, as other frms develop more sustainable business
models and gain a frst mover advantage. Public policy has
an important role to play in incentivizing and facilitat-
ing the private sector to respond to these challenges in a
timely way.
The study has been commissioned by GIZ, with a view to
assisting the Egyptian Ministry of Industry and Foreign Trade
(MTI), and the Egyptian-German Private Sector Development
Programme (PSDP) on behalf of BMZ, to further promote
green growth and green job creation in Egypt.
MTI’s primary objectives are to promote sustainable
economic growth and employment generation, particu-
larly through the promotion of small and medium-sized
enterprises (SMEs), and the development of the local
manufacturing industry. Much of PSDP’s work has focused
on improving competitiveness, particularly of SMEs, and
has operated mainly at the meso and micro level. GIZ more
broadly already has a number of programmes in Egypt
which could contribute to green growth.
In addition, there has been quite a lot of Government-led
work designed to promote the development of sectors
which may contribute to green growth. Thus there is a
good amount of existing work and analysis to draw on.
This study is designed to help show how linkages might
be made between the meso / micro level of engagement
that has been where most PSDP activity has been located
to date, and the macro level framework conditions which
ultimately guide the incentives facing private sector actors
in Egypt.
The aim of the study was to identify a small number of
sectors where there are signifcant opportunities for green
growth and job creation, that can potentially be achieved
in a reasonably short time frame, and at relatively low
cost to the public budget. In other words, to identify low
hanging fruit, and explain in practical terms how they can
be harvested.
This is crucial given the current juncture within Egypt,
where public resources are very tight, and where employ-
ment generation is a priority for a transition government
facing enormous public pressure to deliver new political
freedoms and economic opportunities.
Although environmental concerns are not currently high
on the political agenda, nor is there much awareness about
1 Introduction and framework
for the study
11
the problem amongst the public, it is nonetheless a serious
looming problem that will need to be tackled within Egypt
sooner rather than later.
Building on initial suggestions coming out of previous
engagement and consultation processes, as well as a review
of the existing literature and a stakeholder consultation,
the team identifed three broad and inter-related sectors of
focus for this study: (1) Renewable energy generation and
renewable energy applications; (2) the construction sector;
and (3) the agricultural waste sector.
These sectors were chosen on the basis that they:
• had signifcant potential to generate green growth
and jobs;
• could make a clear contribution to environmental
improvement; and
• that this could be achieved largely through private
sector action, at limited cost to the taxpayer, if the
enabling conditions were put in place through an
appropriate policy framework and supportive institu-
tional environment.
Initial ideas for the sectors of focus were drawn from pre-
vious work by GIZ, by suggestions from stakeholders con-
sulted, and by reviewing the literature. This was narrowed
down to three sectors on the basis of our own (qualitative)
economic analysis in each case of:
• the size of the potential market opportunity;
• the labour intensity of production in that market;
• the availability of the necessary qualifcation base
(determining potential even if not existing skills) in
the local labour force;
• the main barriers to market development, and the
extent to which they could be overcome reasonably
rapidly through policy and institutional reform; and
• the associated costs and trade-offs which also deter-
mine political feasibility.
The next three sections consider each of these sectors in
turn, discussing the opportunities associated with them,
the current framework conditions governing them, and
policy recommendations that could help to unlock those
green growth opportunities. Framework conditions anal-
ysed include:
• The overarching legal and regulatory framework
within which the sector operates, including Ministe-
rial oversight and relevant Government policies and
strategies for that sector;
• Important policy determinants e.g. laws, regulations,
standards, subsidies, taxes, investment rules etc.
• The political economy of potential policy reform;
• The institutional framework e.g. regulatory bodies,
trade associations, voluntary standards, public/pri-
vate partnerships, donor engagement;
• The current state of demand and supply, both inter-
nationally and locally, and how that might evolve in
future;
• Local supply conditions and challenges;
• Skills requirements and availability;
• Knowledge / awareness amongst relevant players and
cultural factors;
• Any additional market failures identifed and not yet
covered under previous headings.
INTRODUCTION AND FRAMEWORK FOR THE STUDY
12
2.1 The opportunity
There are a range of specifc green growth opportunities
arising in this sector. Renewable energy generation –
both wind and solar – is hailed as an area of strong po-
tential comparative advantage for Egypt as a result of its
geography, with high wind and sun potential. However,
energy subsidies which are keeping fossil fuels cheap, are
prohibiting the development of the renewables sector,
which has fallen behind in terms of size and perfor-
mance compared with other countries.
If the renewable energy sector can be developed in
Egypt this presents opportunities for jobs in production,
inputs, parts, maintenance, servicing and other related
industries. It can also generate export revenues given the
growing global demand for renewable energy.
The wind energy sector
Maturing wind generation technology, increasing oil
prices, and a desire in many countries to reduce reliance
on fossil fuels, (bolstered by increasing fnancial incen-
tives, emissions reductions commitments, and a desire
for energy security), is resulting in fast growing demand
and investment in installed capacity in wind generation
at the global level. Egypt has a strong economic wind
energy potential, (ranked ffth in the countries of the
EU-MENA region) due to its geography, particularly
within the Gulf of Suez and the western desert region.
However, Egypt’s investment in wind energy generation
is very low relative to other countries within the region;
total current capacity is 550MW, but it is estimated that
the Gulf of Suez alone has a potential for 20,000MW
of wind capacity. The contribution of wind to overall
national electricity production is still less than 1%. The
wind generation sector is currently almost completely
state-run and donor funded.
However, Egypt’s Renewable Energy Strategy stipulates
that 20% of total electricity generation will come from
renewables by 2020, including 12% from wind and 8%
2 Renewable energy generation
and renewable energy appliances
from hydropower (MOEE, 2010). If policies are put in
place to implement this goal, this would generate signif-
icant investment in wind energy. The observed positive
market reaction to the announcement of plans to in-
crease the contribution of wind energy to the electricity
grid is a clear indication that the Egyptian private sector
is willing and able to react to clear signals.
Technologies are maturing as a result of large scale
implementation in the last few years, and there are now
new business opportunities, capitalising on expected
increases in electricity tariffs and a more liberalised
electricity market. There are opportunities for both small
stand-alone wind turbines, and also larger wind-parks
which can be connected to the national grid.
Many jobs may be generated up and down the supply
chain for the wind energy generation industry, from
local manufacturing of parts, through to operation and
maintenance (O&M). Local manufacturing industry is
now beginning to develop to support the wind genera-
tion industry. The private Sewedy Group has established
El Sewedy for Wind Energy Generation (SWEG) which is
building capacity through alliances with international
suppliers. It has developed some local manufacturing ca-
pability including in wind-turbines and tower manufac-
ture. Local manufacturers are also able to supply cables
and transformers. All of which can generate local jobs.
Currently no O&M companies exist in Egypt, as these
activities are undertaken by the New and Renewable
Energy Authority of Egypt, (NREA), though SWEG has
plans to establish an O&M company. Existing wind farms
have been breaking down, and there has been a serious
shortage of skills within Egypt to maintain them.
The solar energy sector
Egypt is one of the world’s most attractive sites for
solar energy thanks to ample sunlight and proximity to
existing and potential energy grids. Solar energy can be
harnessed through various technologies including:
Construction of Africa’s first solar thermal power station with parabolic trough technology, Kuraymat ?
13
14
1. Photovoltaic (PV) technology that produces electrici-
ty directly from solar energy;
2. Solar heaters;
3. Concentrated Solar Power (CSP) systems, which pro-
duce steam that can be used for industrial purposes,
for water desalination, or in a turbine to produce
electricity.
These need to be considered separately.
Photovoltaic technology is expensive to install, and cur-
rently not competitive with wind power generation, though
as technology develops it could become more competitive
in future. Egypt has high PV potential, which is as yet largely
unexploited. No grid-connected PV generation systems
currently exist in Egypt. Rather PV technology is used in
specifc stand-alone applications (e.g. solar powered mobile
telephone towers) or in unconnected power generation
systems, where it is used for parts of an industrial load (e.g.
lighting). It is also the main power supply for some villages,
as part of demonstration projects funded by donor agencies.
A feed-in tariff for PV would help to develop the market, but
it is not expected to be introduced until the tariffs for wind
energy have been established.
Local manufacturing of PV technologies is very limited
and there is heavy reliance on international suppliers.
However, the industry generates some job opportuni-
ties for local service providers and installers. A study on
local content potential for PV and wind energies showed
signifcant potential in decentralised PV.
PV activities have been fairly limited, to small applica-
tions in remote areas that are not connected to the grid.
As nearly 99% of Egypt’s population is connected, there
does not seem much potential expansion possible in
terms of residential demand, unless different patterns
of demand and supply are developed for PV technolo-
gies. However, demand for stand-alone PV power supply
systems is high within the communication sector (e.g.
for mobile phone networks), and for military, aviation
and navigation aids, and for signs on highways. The total
installed capacity of PV applications reached about 6
megawatts by mid-2008.
Solar water heaters can be used in both residential and
commercial contexts, and are placed on rooftops in order
to capture solar radiation to produce hot water, which is
then held in storage tanks. This is a relatively low-tech
option, and could be highly cost-effective, signifcantly
reducing energy bills. However, investment costs for
solar water heaters are relatively high compared to
prices of conventional heating equipment (electric or gas
heaters), and the subsidisation of fossil fuel energy reduc-
es incentives for its adoption, and as a result the local
market remains limited and undeveloped.
There is more local manufacturing of components for
solar water heaters than other renewable technologies.
According to the Egyptian Competitiveness Report 2010,
there are around 4 local companies manufacturing and
installing water heaters, and another 5 which install
imported systems. Although most components and raw
materials are available in the Egyptian market, around
90% are still imported. If ways can be found to increase
and enhance the quality of locally produced components
and raw materials this could be another potentially sig-
nifcant source of job creation.
It has been estimated that 250,000 solar water heaters
were installed by 2007, resulting in greenhouse gas emis-
sions savings of about 0.25 million tons CO2 equivalent
annually. Another study estimates that this represents
only around 5% of the national potential market. This
implies that 100% coverage would save in the order of 5
million tons CO2 equivalent annually.
There is great potential for increased demand if the
framework conditions were improved, and already
signifcant demand from the commercial sector, (though
this is largely being met through imports currently,
because of the poor quality of locally manufactured solar
water heaters). This sector thus represents a potential low
hanging fruit.
15 2 RENEWABLE ENERGY GENERATION AND RENEWABLE ENERGY APPLIANCES
Concentrated Solar Power (CSP) systems produce
steam that can be used for industrial purposes, or in a
turbine to produce electricity, or for water desalination.
Although technical potential for CSP is signifcant within
Egypt, integration of CSP in industrial processes remains
very limited, although there are some CSP projects scat-
tered across Egypt. Thus demand is still very limited and
stimulated by NREA. There are currently no clear plans
for expanding CSP.
However, a recent World Bank (2011) study assessing
the local manufacturing potential for CSP projects in
the MENA region found that in the Kuraymat project
establishing a CSP plant in Egypt (involving Orascom
industries), around 60% of the value was generated
locally rather than from international players (though
some of the key components had to be sourced from
international suppliers), which compared favourably to
other projects implemented in the MENA region. They
noted that this enabled those frms to gain knowledge
which they should be able to use for future CSP projects,
and concluded that local industry is already capable of
developing and building CSP projects in Egypt, and that
this experience should become a reference point for CSP
projects in the region. So once again the potential for
local industrial development and job creation is clear.
They also noted that Egypt had for a long time been a
regional leader in the glass industry which is valuable for
the renewables sector, but that the industry now faces a
challenge in adapting its capacity to higher technology
content, noting that MENA countries now need to be-
come ‘centres of excellence’ rather than relying on their
traditional position as low cost, low skilled manufactur-
ing centres.
2.2 Framework conditions
The potential for development of the renewable energy
sector in Egypt is highly dependent on framework con-
ditions governing the energy sector as a whole. Egypt
has oil and natural gas reserves, but these are being
depleted quickly, and it will be diffcult to maintain this
high rate of production going forward, as the cost of
extracting remaining resources is expected to increase
signifcantly, and likely to become prohibitively expen-
sive. Egypt has in recent years become a net oil importer,
and with demand for energy in Egypt growing fast, and
a constrained supply, Egypt could potentially face a
serious energy shortage in the near future, and require
increasing imports, which would reduce energy security
and make Egypt more vulnerable to international oil
price shocks.
Despite these serious impending problems, both oil and
gas are subject to heavy subsidies, which clearly incen-
tivise higher fossil fuel use and more energy intensive
forms of production and behaviour by frms and house-
holds alike. These subsidies also seriously undermine the
incentives to invest in renewable energy technologies,
as it means they are much more expensive than the
subsidised fossil fuels. Price distortions favour energy
intensive industries at the expense of labour intensive
industries. This is undoubtedly retarding Egypt’s partic-
ipation in new, high growth industries and technologies
and threatens the long-term energy competitiveness of
the Egyptian economy.
The subsidies also cost an enormous amount of public
money, which is crowding out expenditure on pub-
lic services, and looking increasingly untenable at the
current juncture, with the public fnances facing growing
diffculties. There has been pressure to reduce ener-
gy subsidies for many years, but there are signifcant
political economy barriers to their removal which have
signifcantly hampered progress.
Nonetheless it is inevitable that over time the price of
renewable energy will fall and the price of conventional
fuel will rise. This by itself should generate an incentive
to invest for the long term. Indeed, previous to the revo-
lution there was quite a lot of investment into both con-
ventional and wind energy projects, though the political
uncertainty is now hampering further investment.
16
The 3 independent power providers made good profts
over the last 10 – 15 years, and private energy generation
is seen as a potentially lucrative opportunity, with Egypt
often also acting as a gateway to the rest of region.
The Government has now said that it will remove sub-
sidies from energy-intensive industries such as cement,
steel and fertiliser and has set out a schedule for achiev-
ing this. This has resulted in some investment in alterna-
tive forms of energy by those companies.
Although Egypt is now a net oil importer, it continues to
export oil and gas under long term contracts. But since
the world oil price has increased considerably in recent
years this has meant that export prices were lower than
spot world market prices. This represents an enormous
opportunity cost, and has led to the renegotiation of a
number of contracts.
More generally, all aspects of the energy sector are dom-
inated by the state, which is responsible for more than
99% of all generation. The transmission utility is a state
owned monopoly, the distribution utilities are also state
owned, and bulk sale prices are regulated by the state. All
of this prevents or strongly discourages private involve-
ment.
A new Electricity Law was endorsed by the Cabinet in 2008,
though it has yet to go to Parliament, which will now take
place at the end of 2012 at the earliest. The law will gradually
permit more private involvement in the energy market, by
allowing third party access to the infrastructure owned by
the Ministry of Electricity, and unbundling ownership of the
distribution system. This will facilitate private sector invest-
ment in energy generation and distribution. Competition
will be encouraged by allowing a limited number of quali-
fed consumers to contract directly with generators. This will
be phased in gradually, with some fexibility to avoid market
shocks, but a timetable will be set and announced in order to
provide the clarity needed by private investors. Privatisation
could potentially transform the market for independent
service providers.
The same approach will be taken to the market for re-
newable energy generation. The Electricity Transmission
Company and distributors will be mandated to connect
renewable energy power plants to their networks. The
NREA will call for competitive bids to construct renew-
able power plants, and the transmission company will
also call for competitive bids to construct connection
infrastructure. In due course, a feed-in tariff will be
introduced for the purchase of renewable energy. To
help cover the grid’s costs to support renewable elec-
tricity, a Renewable Energy Fund will be established. Its
main source of fnance will be the subsidies saved from
fossil fuels, which otherwise would have been used for
electricity generation. These reforms will undoubtedly
move things in the right direction, if and when they are
implemented.
Thus there is a plan to involve private companies in wind
generation in future through a competitive bidding pro-
cess, initially with associated guaranteed long-term pow-
er purchase agreements to reduce risks for investors. The
plan is to target highly qualifed international developers
with strong fnances and offering signifcant technology
transfer. Preference will be given to those committing to
use a higher share of locally manufactured components.
In due course a feed-in tariff will be introduced, taking
into consideration the prices achieved in stage one.
There is currently very limited scope for trade in energy
as physical interconnection between Egypt and neigh-
bouring countries is weak. This limits the potential for
domestically generated renewable energy to be exported
to Europe or other countries where demand for renew-
ables is likely to grow. Strengthening the intercon-
nection is likely to be very costly and does not seem
imminent.
Beyond the large scale wind generation industry, the
local market for renewable energy applications (e.g. solar
water heaters, and photovoltaic technologies) is unde-
veloped. Overall awareness of the availability of these
products – and of their potential fnancial viability – is
17
very low amongst potential consumers, and the local
companies supplying these products are not well known
either. There are some SMEs operating in the market,
but they tend to lack technical and fnancial capacity to
expand.
In addition, SMEs involved in the renewable energy
sector are poorly supported and weakly networked, and
have no association to represent them and interact on
their behalf with other stakeholders such as policymak-
ers, regulators, and donors and consumer organisations.
As a result the market for local renewable energy appli-
cations does not seem to be working well. Despite what
seems to have been a reasonable level of existing demand
for some potentially locally-produced appliances, such
as solar water heaters e.g. by hotels and restaurants,
these do not seem to have been available from the local
market, and have instead had to be imported, or dropped
from plans. This may be partly because of the poor qual-
ity of locally produced solar water heaters in the past.
Grant funded NGO programmes to install solar water
heaters have sometimes undermined market develop-
ment by paying insuffcient regard to the quality and
ongoing maintenance of units supplied, giving the whole
sector a bad reputation.
There seem to be many skills gaps that need flling. For
example, there is a severe shortage of skills to maintain
wind farms. The system for vocational education in
Egypt is highly fragmented and there are no common
standards for qualifcations. The Ministry of Environ-
ment does not have a mandate to identify skills gaps and
develop qualifcations to address them.
The culture of entrepreneurship is relatively limited
within Egypt, as most well qualifed individuals have tra-
ditionally seen formal employment as the optimal form
of livelihood – indeed almost as an entitlement – and
thus do not see entrepreneurship as a desirable alterna-
tive. This weak entrepreneurial culture is also refected
in the banking sector, which tends not to serve the SME
Private owner of a photovoltaic system
2 RENEWABLE ENERGY GENERATION AND RENEWABLE ENERGY APPLIANCES
18
sector well, or to be good at evaluating new small busi-
ness prospects. However, arguably the binding constraint
is know-how rather than access to fnance for the SME
sector. While for investments with a long payback, access
to fnance may present more of a binding constraint.
A shortage of patient capital for long term projects is a
problem in many countries globally.
2.3 Policy recommendations and
economic considerations
Policies have clearly been starting to move in the right
direction, although it remains to be seen whether the
policy direction will remain the same under the new
government, and whether the planned policies are
actually implemented. The current political uncertainty
is an enormous disincentive to private investment, so the
sooner greater clarity is achieved on the future Govern-
ment’s economic stance and policy direction, the better.
The removal or reduction of fossil fuel subsidies is clearly
a key element of the framework conditions that would
be conducive to development of the renewables sector.
Reducing fossil fuel subsidies represents a signifcant
win-win, as it would save a lot of public money. But it
would also, of course, push up prices to users. This gener-
ates three main areas of concern:
1. Whether the removal of subsidies will hurt poor
people. But energy subsidies do not target the poor
well. A high proportion of the subsidies go to large
consumers of electricity, which tend to be people
in high income brackets e.g. owners of high energy
consumption cars, and energy intensive industries
who can then make excess profts. Sustaining energy
subsidies limits the Government’s ability to invest
in health, education and infrastructure, which are
important for the country generally, and particularly
for the poor. Replacing energy subsidies with mone-
tary payments to poor households is one option that
may be politically expedient, and would also be a
more effcient way to target the poor with assistance.
2. Whether the removal of subsidies will damage the
private sector, by driving up costs and reducing their
competitiveness on world markets. The counter
argument is that artifcially low energy prices are
signifcantly distorting the market, making Egypt’s
production methods and general way of life highly
energy intensive, which will reduce the competi-
tiveness of Egypt in the long term. Price distortions
favour energy intensive industries at the expense of
labour intensive industries, so maintaining energy
subsidies may be retarding Egypt’s participation in
new, high growth industries and technologies.
In fact the removal of fossil fuel subsidies could help
Egypt to beneft from frst mover advantages. There
will be winners and losers in the global transition
to cleaner energy, and pioneering countries will
develop industries and technologies which will open
avenues for indigenous development and export,
alongside opportunities for outward FDI generating
new markets and proftable investment opportuni-
ties for the Egyptian private sector. The growth of
energy intensive industries while energy is artifcial-
ly cheap is likely to become a liability in the medium
term.
3. Whether the removal of energy subsidies will dam-
age traditional fossil fuel producers within Egypt.
Even this is unlikely to be a signifcant problem, as
demand is growing faster than supply, and Egypt’s
reserves are projected to run out in the not too dis-
tant future, so the exploitation of fossil fuels is likely
to continue to the extent possible in any case, even
as alternative energy sources are developed.
Thus there is little economic downside from the removal
of fossil fuel subsidies. However, some of the neces-
sary changes will be politically challenging, and have
been stymied in the past by vested interests opposed to
reform. Removal of fossil fuels subsidies has been a chal-
lenge in many other countries, as they are both unpop-
ular with big business, which claims their removal will
undermine its competitiveness, as well with the public,
19
who fear it will push up household energy prices – par-
ticularly affecting the poor. In practice fossil fuel sub-
sidies tend to disproportionately beneft richer people,
who have higher energy consumption, so are not a good
way of targeting assistance to the poor. Yet this is a strong
coalition for government to fght, and many countries
maintain fossil fuel subsidies for this reason.
The considerations above suggest that subsidies should
be phased out over time, to give people time to adjust,
and should be undertaken in a politically sensitive way,
that neutralises vested interests opposed to reform, and
focuses on how money that is saved will be spent in
future.
This may involve compensating those groups who are
losing out from the reform, and it could also involve the
establishment of a new, better targeted welfare system
to support the poor. In addition, some of the subsidies
should be redirected to supporting renewable energy, as
is currently planned, notwithstanding the need to use
some of the savings to pay down debt and improve the
public fnances.
In addition, ways can be found to reduce subsidies that
will stimulate other green improvements. For example,
the Energy Effciency Unit of the Supreme Energy Coun-
cil has proposed a new concept for a scheme whereby
the price charged to a business for electricity depends on
how energy intensive it is compared with the average for
the sector. If is higher than the average level of energy
intensity, the business must pay a higher price.
Thus the process of reducing energy subsidies clear-
ly needs to be implemented carefully, but given the
strength of the case, and the fact that action will be
urgently needed in order to sort out the public fnances
in the short term and avert energy crises in the medi-
um term, and given there will be a new Government in
place, potentially with a much stronger mandate to make
transformational changes, the potential to make progress
on this under the new Government looks perhaps stron-
ger than it has been before.
However, even in the absence or slow implementation of
subsidy reduction, it should be possible to make progress
in developing the renewables sector, through improve-
ments in the enabling environment and other frame-
work conditions governing the sector. In any case, given
that growth in demand is outpacing growth in the supply
of fossil fuels, and prices of conventional fuels will inevi-
tably rise going forward, while the cost of renewables will
fall, the longer term direction of travel seems inevitable,
and this in itself should strengthen investment incen-
tives.
What is ideally needed is a planned and determined shift
to renewable energy: a clear, long term, holistic imple-
mentation plan for the development of the sector, which
gives consideration to private sector incentives, likely de-
velopments in both domestic and international demand
for renewables, and technological innovation, and which
considers how the whole supply chain can be developed
to generate a competitive industry along with broad
based growth and job generation. The policy should set
out targets, timeframes, resources, responsibilities (incl.
public sector vs. private sector), and indicators and needs
some fexibility to respond to changing conditions, as
well as more detailed plans for the short term.
It should be developed in conjunction with the various
relevant Government Ministries, the private sector,
and civil society, (including universities and research-
ers developing new technologies), while attempting to
predict and address political economy barriers to action.
An appropriate institutional set up is needed to achieve
this. The existing Supreme Energy Council may have
adequate authority to do this successfully, but will have
to overcome challenges associated with inter-Ministerial
policies and inconsistencies within current mandates.
Such a holistic framework or Action Plan – if credible
– would provide the increased clarity needed to create
the right incentives for the private sector to invest and
innovate in renewables. The positive market reaction to
the announcement of plans to increase the contribution
2 RENEWABLE ENERGY GENERATION AND RENEWABLE ENERGY APPLIANCES
20
The Tunisian Solar Programme (PROSOL) – a joint
initiative of the Tunisian National Agency for Energy
Conservation (ANME), the state utility Société
Tunisienne de l'Electricité et de Gaz (STEG), and the
United Nations Environment Programme – pro-
vides an example of successful solar thermal market
development. It took a holistic approach, actively
involving all the sector stakeholders, including the
banks. The project incorporates: (i) A loan mech-
anism for domestic customers to purchase SWHs,
paid back through the electricity bill; (ii) a capital
cost subsidy provided by the Tunisian government;
(iii) discounted interest rates on the loans which
were progressively phased out; (iv) supply side
promotion; (v) establishment of a quality control
system; (vi) an awareness raising campaign; (vii) a
capacity building program; and (viii) carbon finance
through the CDM.
Box 1: Case study on PROSOL
Over 50,000 Tunisian families now get their hot
water from the sun, and as of 2008, PROSOL helped
avoid 214,000 tonnes of cumulative CO2 emissions.
Jobs have been created as 42 technology suppliers
were officially registered and at least 1000 com-
panies installed the systems. The annual avoided
subsidies of displaced LPG for the Government were
estimated at around $3 million in 2008.
Source: “Solar Thermal Application in Egypt, Jordan, Lebanon, Palestinian Territories, Syria and Tunisia:
Technical Aspects, Framework Conditions and Private Sector Needs” Workshop Report, March 2009, GTZ
21
of wind energy to the electricity grid is a clear indication
that the Egyptian private sector is willing and able to
react to clear signals. The already planned liberalisation
under the Unifed Electricity Law and the removal of
fossil fuel subsidies may be expected to have signifcant
impacts on private investment, if progress towards them
is credible. However, much more could be done.
Specifc policies that could be adopted within the context
of an Action Plan as set out above, potentially with the
support of international donors, could include:
1. Public education of benefts (e.g. in terms of energy
savings and future risk mitigation) and public-private
dialogue in order to mobilise support for the required
transformation. This should be based on an informed as-
sessment of the costs and benefts of different approaches,
and also the costs of inaction, to make a strong case.
National, informed dialogue is the frst step needed to get
this transformation underway. The Egyptian public cur-
rently has a fairly limited awareness of either the looming
threats or the potential opportunities Egypt faces.
2. Political economy considerations / analysis designed
to understand poverty impacts and to identify and
address the vested interests who are likely to be
opposed to the reform. The development of political
tools will be needed to neutralise the potential mo-
bilisation of these vested interests.
3. Use of economic incentives to stimulate private
investment e.g. procurement policies, differential
pricing and taxation to promote renewable tech-
nologies, fnancing mechanisms etc. Other than the
expected Unifed Electricity Law, the main policy pro-
moting renewable energy technologies is the reduced
customs tariff for equipment and components.
4. Effort should be made to attract foreign investment in
renewables. There is also a need to speed up the pro-
cess for investment in the renewable sector (i.e. tenders
should be handled more effciently). A one stop shop
could be set up for all potential investors, including
small wind farms. At the same time, service providers
from abroad could be required to train local counter-
parts within Egypt to facilitate skills transfer.
5. Use of licensing requirements for industrial energy
users to incentivise use of renewable energy. For
example, new cement plants are already required to
provide their own energy sources, and this has stim-
ulated their interest and investment in stand-alone
renewable energy generation projects. Similarly, the
Government could introduce a requirement that
some proportion (e.g. 25%) of energy in hotels should
come from solar energy sources over a certain time
period. Or if a property developer uses solar water
heaters they will be given a licence to build more
rooms or more apartments.
6. Use of downstream regulation e.g. new building
codes, to incentivise or require use of technologies
such as solar water heaters (as discussed further in
the next section).
7. Investment in connections of renewable energy gen-
eration installations to the grid. This can potentially be
at least partly privately fnanced, if there is suffcient
liberalisation (e.g. of transmission, distribution, pricing
etc.), to allow private involvement. The proposed new
Electricity Law states that it will be the state-owned
transmission and distribution utilities that will con-
struct and fnance new connections. International
experience has shown that relying on the establishment
of these connections through state owned utilities can
become a major bottleneck to development of the sec-
tor. This is particularly true when state owned utilities
are likely to suffer from a shortage of investment capital
at times when the country is in fnancial diffculties.
Thus some form of public private partnership frame-
work should be sought.
8. In the longer term, investment in infrastructure to
facilitate the export of solar power based electricity.
2 RENEWABLE ENERGY GENERATION AND RENEWABLE ENERGY APPLIANCES
22
This is likely to generate much stronger incentives
for renewable energy development, particular in light
of trends coming from Europe to purchase more
renewable energy, and the opportunities associated
with emissions trading schemes. In the meantime, it
could be possible to explore a virtual market whereby
natural gas is exported and is paid for by European
consumers under a carbon market mechanism, if it is
being replaced in the domestic national grid within
Egypt by solar energy.
9. Development of a clear regulatory framework for the
renewable energy industry, and the development,
testing, certifcation and enforcement of standards
e.g. quality standards for solar water heaters, under
the Egyptian Electric Utility and Consumer Protec-
tion Regulatory Agency.
10. Some reorganisation of the bodies governing the
sector may be required. The New and Renewable
Energy Authority (NREA), an organisation affliated
to the Ministry of Electricity and Energy, current-
ly has responsibility for developing the renewable
energy sector in Egypt. However, this means it has
responsibility both for policy on renewables, as well
as developing, operating and maintaining most wind
farm projects within Egypt, which could represent a
potentially signifcant confict of interest, particularly
following liberalisation and greater private sector
involvement in the sector.
11. A clear strategy for the development of the solar
energy sector would also make sense, building on the
strategy already articulated for the wind sector.
12. Policies to promote local production of inputs for
renewable energy technologies, both to generate
jobs and economic opportunities locally, and to
avoid negatively affecting the national trade balance
through increasing imports. Indeed, the current
import incentives for components of renewable
energy generation need to be revisited and tailored to
optimise the pace of transformation and the develop-
ment of the local supply chain. The creation of a local
industrial base to serve this growing industry could
also provide an important political asset to sustain
progress in the initial stages of the transformation.
This should be focused on the wind energy sector in
the frst instance, as that will have the most growth
potential initially.
13. However, policies to stimulate local production also
need to balance the short term costs of requiring
local input production, which will depend on existing
local production capacity, and its quality, cost and
reliability vis-a-vis imported components. For exam-
ple, it may be best to put in place incentives for 20%
of solar water heaters to be locally produced, with
a target to increase that proportion to 40% within a
specifed time frame. If too strict, local input require-
ments can jeopardise the success of the sector as a
whole. This will clearly vary product by product. Poli-
cies to promote localisation of supply should there-
fore be designed carefully to promote and incentivise
improved local production over time, with minimum
short run cost to downstream users, and also with the
aim of reducing investment costs in the long term,
thus improving the feasibility of the renewable sector
in Egypt.
14. Capacity building and development of the SME
sector is also required, including the development
of SME networks, and perhaps the creation of an
umbrella body that can undertake roles such as
establishing an up to date catalogue of suppliers,
providing a repository of market information to keep
involved SMEs up to date with new developments,
provide matchmaking services between suppliers and
consumers, undertaking value chain studies, devel-
oping marketing materials and training courses, and
providing representation within policy debates.
15. Increased funding and support for energy R&D, and
mechanisms to facilitate coordinated R&D, linking
23
Construction of a wind farm near Zafarana
2 RENEWABLE ENERGY GENERATION AND RENEWABLE ENERGY APPLIANCES
24
the various players involved to each other and to
market players. This could build on the approach
adopted for the GIZ-supported Innovation Networks
which already cover 9 different sectors including
solar water heaters and green construction. Feasibil-
ity studies, and the introduction and expansion of
demonstration projects in the different technologies
could also be valuable, alongside the strengthening of
intellectual property rights. Development of neces-
sary skills and accredited training courses. Specifc
training is needed to improve local capacity in design
and construction, operation and maintenance,
and engineering. Undergraduate and postgraduate
courses are required, with accredited qualifcations
established in cooperation with NREA. A process of
identifying key skills gaps should be undertaken.
MTI’s Productivity and Vocational Training De-
partment (PVTD) can address vocational training
for green sectors, but there is also a need for a more
coordinated approach to developing technical and
vocational education and training, with inter-Min-
isterial cooperation including with the Ministry of
the Environment. It is also important to discuss with
other market players how best to provide training e.g.
through public or private provision.
16. New fnancing mechanisms for SMEs. Most SMEs
seems to fnance start-up from their own funds.
There does not seem to be a strong culture of lend-
ing to SMEs within the banking sector. Policies to
encourage banks to develop new lending streams
for SMEs, and some form of subsidisation (e.g. in
the form of loan guarantees) could be considered in
light of the substantial externalities, and to facilitate
demonstration to banks of the potential commercial
value of this sector. In addition, fnancing mecha-
nisms to support the upfront investment in renew-
able energy by consumers may also be considered.
17. The Clean Development Mechanism has been used
for three wind projects to date in Egypt. Further con-
sideration should be given to the potential for both
public and private climate fnance to contribute to
investment in the renewable sector in Egypt. Stream-
lining procedures, particularly those related to the
Designated National Authority (DNA) may assist with
the aim of accessing private investment funds. The
development of a mechanism or umbrella organi-
sation (e.g. a sustainable energy users association) to
aggregate small projects together into larger projects
could also facilitate increased access to mechanisms
such as CDM.
A GTZ / MTI study on the prospects for the renewable
energy sector in Egypt produced in 2009 also sets out a
detailed proposal for a ‘roadmap’ to achieve the develop-
ment of the sector.
There are some risks associated with future oil and car-
bon prices, and technological developments which may
result in competitive dominance of one form of renew-
able energy over another. However, there will always be
some uncertainties, and there are substantial risks and
costs associated with inaction as well, thus calculated
risks will need to be taken going forward, and diversi-
fcation e.g. into different types of renewables may be
recommended to minimise those risks.
In sum, If the new energy law is implemented it should
generate more jobs, and as there is growing demand for
energy, these jobs are unlikely to be at the expense of
jobs in the fossil fuel energy generation sectors – they
are perhaps more likely to be at the expense of imported
fuel. While it is possible that in the short run at least, the
cost of domestically produced renewable energy will be
higher than fossil fuel imports, there are many signifcant
long run gains to set against this short term cost, such
as energy security (bearing in mind the substantial fscal
burden of higher net imports of oil if oil prices continue
to rise or spike in future), jobs, FDI bringing physical cap-
ital with associated technological spillovers and human
capital investment, development of local manufacturing,
and potential future comparative advantage generating
future outward investment opportunities.
25
Long term goals
• Push for: fossil fuel subsidy removal; implementa-
tion of the National Electricity Law; improved regu-
latory framework for renewables; and development
of a cross-Ministerial strategy to develop the sector.
• Explore public/private partnership framework to
invest in connections of renewable energy genera-
tion installations to the grid.
Box 2: Top priorities for MTI to promote
the renewable sector
Potential quick wins
• Take steps to reduce disincentives for foreign
investment in renewables incl. speeding up the
investment process, creating a one stop shop for
potential investors, and signalling welcome to
foreign investors.
• Introduce licensing requirements or ‘carrots’ for
industrial energy users to incentivise use of renew-
able energy.
• Undertake awareness raising activities, develop
quality standards, and support the provision of
accompanying training for local SMEs so they can
better serve domestic renewables industry.
2 RENEWABLE ENERGY GENERATION AND RENEWABLE ENERGY APPLIANCES
26
3.1 The opportunity
The construction sector contributes around 4-6% of GDP
in Egypt and around 7-8% of total employment, includ-
ing many jobs for low skilled or unskilled workers. In
addition, the employment elasticity of the construction
sector is high, implying that a relatively small increase
in economic activity in the sector will have a signifcant
impact on employment.
At the same time, the construction sector offers signif-
icant potential for improvements in energy effciency.
The building sector is the biggest single consumer of
fnal energy worldwide, using 35-40% of energy resources
and contributing about a third of all energy-related CO2
emissions. The sector also offers the highest potential
for energy savings and the use of renewable energies.
By improving building design, and using well-known
technologies such as insulation, solar water heaters, and
effcient lighting etc., substantial energy savings can be
made – enough to make the initial investment required
in energy effciency improvements pay for itself within a
short time period.
Thus at no additional cost to the overall economy,
strengthening incentives for energy effciency in both
existing and new building stock in Egypt could stimulate
signifcant numbers of new job opportunities in the con-
struction sector – particularly through the retroftting of
existing buildings with insulation and solar water heaters
etc. It would also facilitate the development of – and job
creation in – local manufacturing industries involved in
supplying the necessary products and materials. As dis-
cussed above, the potential for Egyptian produced solar
water heaters is particularly clear.
Green construction more generally involves planning,
design, construction and maintenance of buildings
in a way that achieves resource effciency and energy
effciency, including greenhouse gas emissions reduc-
tion, pollution prevention, noise abatement and waste
removal. International best practices have shown that
green construction can yield a 40%+ saving on construc-
tion costs and improved lifetime performance. The trend
towards green construction is becoming increasingly
apparent across the whole MENA region, thus mastering
it could also increase competitiveness of the Egyptian
construction industry, enabling it to become a regional
pioneer in this feld.
3.2 Framework conditions
Once again, energy subsidies are undermining incentives
to adopt energy effciency measures in buildings. The
MED-ENEC project which supported energy effciency
in the construction sector of 10 southern and eastern
Mediterranean countries including Egypt, showed in its
pilot projects an average saving of 57% of primary energy
for heating and cooling, compared to a conventional
building in the same country. Such savings should in
principle generate strong demand for energy effciency
measures in both new and existing buildings. However,
energy subsidies signifcantly undermined those incen-
tives within Egypt, and meant that the payback period
before the cost of any initial investment was recouped (in
terms of savings on energy bills), was much longer than it
would otherwise have been, estimated at 30 years in the
case of Egypt.
Of course, the incentives depend very much on who is
paying for the electricity, and who is paying to invest in
energy effciency. As it would likely be homeowners who
are investing in energy effciency measures, but who do
not pay the full cost of energy due to the subsidies, their
incentives are low. However, by reducing demand for
electricity in buildings, energy effciency measures would
also substantially reduce the cost of subsidies paid by the
government, thus the government itself will potentially
gain fnancially from the energy effciency measures over
a certain time period, and this may provide a case for
government to pay for, or subsidise, the energy effciency
measures itself. However, given short run current fnan-
cial constraints this may not be feasible, and removal of
the subsidies would be the better solution for the econo-
my as a whole.
3 Construction Sector:
Green Buildings
Construction worker at the building site of the Alexandrian Library ?
27
28
Green building standards are another important way to
incentivise investment in green construction, and could
work even in the absence of subsidy removal if enforced
properly. The Ministry of Housing, Utilities, and Urban
Development is responsible for developing and updating
the national Building Energy Effciency Codes (BEECs).
The residential BEEC was introduced by a ministerial
decree in 2005 and a commercial BEEC was established
in 2009. Both codes were developed with international
assistance provided through the United Nations Devel-
opment Program and the Global Environment Facility.
The residential BEEC is expected to reduce electricity
for cooling in air conditioned new homes by 20 percent
while improving comfort in non–air conditioned new
homes. Both codes and a third BEEC for public buildings
are mandatory. But the process of BEEC enforcement is
still in a very early stage, and compliance is negligible. A
comprehensive implementation program was designed
but has not been implemented. Thus, basic compliance tools
are still lacking and capacity building has not taken place.
The Egyptian Green Building Council, (EGBC) was
established in 2009 with an objective to promote green
construction, and comprised Government offcials from
many departments (including MTI), business leaders,
NGOs and labour leaders. One of the aims was to encour-
age building investors to adopt BEECs as well as other
sections of existing codes targeted at energy effciency
and environmental conservation.
The EGBC also developed the Green Pyramid Rating
System (GPRS), upon which a consultation document was
published in April 2011. The GPRS provides three levels of
voluntary certifcation for green buildings based on defned
requirements. This mirrors similar schemes that have been
developed in other countries, and which provide evidence
that owners, investors and the public are starting to place a
premium on certifed green buildings. Whether this is also
likely to be the case within Egypt remains to be seen, and
probably depends in large part on the success of associated
awareness raising activities and culture change required
in order to achieve real improvements in environmental
awareness and decision making. Currently there seems to
be little awareness and information about the building code
among the stakeholders involved.
Another relevant scheme is the Green Star Hotel Initia-
tive, which is a public / private partnership that has been
developed by Orascom Hotels, AGEG Consultants and
GIZ. It is a voluntary eco-label initiative, by which hotels
are awarded a certain number of green stars depending
on their adoption of various sustainability and energy
effciency related measures, and thus could potentially
increase demand for green construction in the hotel
sector. This is a voluntary scheme, designed to respond to
the growing environmental awareness of international
consumers, who are increasingly questioning the envi-
ronmental credentials of the various tourism services
they consume when travelling abroad. However, this
kind of environmental awareness is currently seen much
less amongst Egyptian consumers.
Other market failures that are undermining the adoption
of energy effciency measures in buildings include the
following:
• Developers and potential clients are not aware of
the technical and fnancial potential of the energy
effciency measures.
• Suppliers and developers (noting that the sector
is dominated by SMEs and exhibits a high level of
informality) lack know-how for the identifcation,
procurement and implementation of appropriate
energy effciency measures. The informal nature of
the sector also discourages investment in skills and
training of the workforce. The construction sector
supply chain is fragmented, and different players
within it have different interests and risk perceptions.
There is a lack of skilled engineering, architecture,
installation and maintenance capacities.
• There is a lack of fnancing to pay for the higher
upfront costs of green construction. Potential clients
29
Source: “Green Jobs: Towards decent work in a sustainable, low-carbon world.” UNEP & ILO 2008.
The German Alliance for Work and the Environment
introduced a major initiative to retrofit German
homes. The Alliance is a collaborative effort between
the German government, unions, NGOs, and em-
ployers’ federations. From 2001–2006, an estimated
$5.2 billion of public subsidies stimulated close to
$20.9 billion in investment and resulted in 342,000
Box 3: Case Study on Green Buildings
apartment retrofits by March 2006. Energy efficient
measures included improving heat insulation of
roofs, windows, and walls; introducing advanced
heating technologies and controlled air ventilation
systems; and using renewable energy such as PV or
solar thermal systems.
An estimated $4 billion was saved through addition-
al tax revenues and reductions in unemployment
benefits, along with 2 percent of annual emissions
attributed to buildings in Germany. In 2005, the
funding was increased to almost $2 billion per
year. For every $1.4 billion invested in the program,
25,000 additional jobs were expected.
3 CONSTRUCTION SECTOR: GREEN BUILDINGS
30
often do not have the fnancial capacity and liquid-
ity to bear the upfront cost of energy effciency
investments, even if they are aware of their likely
proftability. Egyptian banks have little experience
and expertise in evaluating energy effciency projects,
they are usually not interested in the relatively small
credit amounts, and do not take into account the
higher available income of the borrowers through
energy cost savings in future.
• The economic benefts of the energy effciency im-
provements often do not accrue to those bearing the
costs, particularly when a property is rented out by
the landlord to a tenant.
3.3 Policy recommendations and
economic considerations
The Egyptian Competitiveness Report recommends
that the Egypt adopts a green construction strategy, by
convening public and private sector representatives from
the construction industry, to develop a plan and estab-
lish the standards and incentives for green construction.
This strategy development could build on the work and
multi-stakeholder approach adopted by the EGBC. Mea-
sures could include:
1. The continuation / strengthening of the system
of progressive electricity tariffs, a sliding scale for
electricity prices, which starts low, but escalates as
energy use per unit increases. This would strengthen
incentives for energy effciency measures by proper-
ty owners. A progressive tariff could also be intro-
duced for gas pricing.
2. Enhancing enforcement of building codes. Investing
in more inspectors to strengthen enforcement would
create jobs directly, would raise awareness and com-
pliance, and could even be self-fnancing through
the imposition of fnes for non-compliance. Alter-
natively this task could be outsourced to a private
company.
Engineers repairing an electric generator at the Aswan Dam
31
3. This should however, be accompanied by a review
of regulations and standards to promote energy
effciency. Current regulations may not be effective
because they are too ambitious, and thus unrealis-
tic and unachievable for many contractors. Thus it
may be necessary to review existing regulations in
dialogue with those in the industry, and adapt them
as necessary, to make them more achievable, with
a view to gradually strengthening them over time.
Thus a phased approach could be applied.
4. Performance ratings could be introduced for specifc
features such as air conditioning and ventilation. De-
velopment and marketing of labelling schemes could
be undertaken. A major marketing drive and media
campaign could be launched in conjunction with
the EGBC to raise awareness about its new Green
Pyramid Scheme. International quality and energy
effciency management norms (e.g. the ISO standards)
could be adopted and adapted for Egypt and promot-
ed in the industry.
5. The introduction of fscal or other fnancial incen-
tives e.g. green taxes, eco-taxes, or landfll taxes could
be introduced to generate revenue that can be used
to subsidise the initially higher costs of green con-
struction, and that can also potentially increase the
attractiveness of green buildings. Property developers
using energy effcient technologies e.g. solar water
heaters, could be given additional rights e.g. extra
land, or rights to build more apartments etc.
6. Government procurement requirements could be
introduced e.g. requiring that developers abide by
minimum energy effciency standards for Govern-
ment-fnanced low income housing projects for
example. Energy effciency requirements for public
buildings could be adopted.
7. Working with fnancial institutions to improve access
to credit for the upfront costs of energy effciency
measures, (detailed recommendations for this were
provided in the KfW report “Promotion of Energy
Effciency in Egypt through Financial Institutions”)
or to provide subsidised credit programmes or credit
guarantee schemes. This could include the creation
of an Energy Effciency Fund to fnance investment
in energy effciency measures, which should pay for
itself in terms of reduced future energy subsidies, and
could be implemented through the domestic banking
system to build its experience of investing in energy
effciency thus demonstrating the fnancial viability
of such investment.
8. Studies, demonstration projects and awareness
raising campaigns for both the industry and consum-
ers, to illustrate the costs and benefts of improved
energy effciency measures. This will work most
effectively where there are expectations of increased
energy prices going forward.
9. Incorporation of energy effciency into higher edu-
cation programmes and increased R&D expenditure
and network building between existing R&D players.
10. Working with the private sector to identify where
there are gaps in the availability of suitable materials
and technologies within Egypt, and explore the possi-
bility to support the development of these industries
locally.
11. Working through schemes designed to support SMEs
and professionals involved in the sector, to raise
awareness and build relevant skills and capacity,
including helping SMEs to comply with standards.
12. Investigating international sources of green climate
fnance that may help to underpin the necessary
investments. Sectoral projects could be developed
that could qualify for CDM e.g. for effcient lighting
or appliances.
3 CONSTRUCTION SECTOR: GREEN BUILDINGS
32
Manufacturing of a wind power station
33
Long term goals
• Push to build on current dialogue approaches
within EGBC, in order to develop a green construc-
tion strategy, review and adjust existing standards,
strengthen enforcement, and develop performance
rating / labelling schemes.
• Work with the private sector to identify where there
are gaps in the availability of suitable materials and
technologies within Egypt, and explore the possibil-
ity to promote the development of these industries
locally.
Box 4: Top priorities for MTI to promote the
green construction industry
Potential quick wins
• Work with fnancial institutions to improve access
to credit for the upfront costs of energy effciency
measures, or to provide subsidised credit pro-
grammes or credit guarantee schemes.
• Work through schemes designed to support SMEs
and professionals involved in the sector, to raise
awareness of market opportunities and build rele-
vant skills and capacity, including helping SMEs to
comply with standards.
3 CONSTRUCTION SECTOR: GREEN BUILDINGS
34
More than 50 percent of the Egyptian population depend
on agriculture as their main economic activity, and an
enormous amount of agricultural solid waste is gener-
ated every year. The sound disposal of agricultural solid
waste is thus one of the most pressing environmental
problems currently facing the country.
It is also one of the most visible, because the burning
of agricultural waste, and particularly rice straw, has in
large part been responsible for the creation of what has
become known as ‘the black cloud’ of pollutants which
affect Cairo and the Delta region during the months of
October and November each year.
Egypt is a major rice producer, generating around three
million tons of rice straw annually, most of which is
still being disposed of through burning in open felds
which is both wasteful, ineffcient, and highly polluting.
However, this continues largely because of the costs, time
pressures, and logistical diffculties associated with other
methods of removal of rice straw.
Available statistics indicate that only around 40 percent
of generated agricultural solid waste (about 6.9 million
tons/year) is currently utilized, while the remaining 60
percent is discarded as waste, either burnt, or illegally
dumped, both of which cause major environmental
problems. However, there are many potential uses of rice
straw (and other agricultural residues), which represent
signifcant market opportunities. Thus rather than being
viewed as a problem, agricultural waste should be rec-
ognized as a resource that might be utilized to generate
income and help conserve other, non-renewable resourc-
es. There are various potential uses for agricultural waste,
which are discussed in turn below.
4 Agricultural waste management
4.1 The opportunity
Production of biofuel which can be sold domesti-
cally, or exported
Residues from rice have been widely exploited for heat in
rice producing countries worldwide. For example, many
hundreds of thousands of people continue to cook on
specially designed rice husk stoves. Others use gasifca-
tion and biogas systems on a household scale and others
explore community-scale electricity generation from
locally produced biomass. However, there seems to be
very limited use of rice residues for energy in households
in Egypt, although R&D and pilot-scale ventures have
attracted attention and some agency-led investments
have been made. Small-scale use for home heating and/
or cooking was more common in the past, before rural
areas were electrifed and/or supplied with relatively
low-cost LPG gas in transportable bottles. So thus far,
energy from straw has remained small in scale in Egypt,
and is still being piloted, although a number of proposals
for larger-scale exploitation have been made.
Agricultural residues can be burned to generate electricity
to provide energy for farmers, or used as feedstock for
village-based centralized waste to energy (WTE) plants;
it can also be used to create biogas at the household level
through small units, or used to produce biogas on a more
industrial scale.
Generation of biogas from agricultural residues has been
promoted by the Government for many years, with a
number of small demonstration units established. Two
Government-funded plants have been constructed
with technical and fnancial assistance from China. Gas
produced is currently piped free of charge into houses in
local villages for cooking. This technology has consider-
able potential to be of value in other Egyptian villages.
However, with widespread access to modern power/fuels
in recent years, and subsidized prices, there has been
limited demand for alternative forms of energy. This may
change over time as discussed previously.
Woman during the harvest of cotton, Nile River Delta ?
35
36
But another market option to explore is the potential for
export. For example, rice straw pellets can be manufac-
tured and exported. A large-scale straw pelleting plant
was commissioned in 2008 for the sale of pellets into
export markets. One private factory has been established
so far producing biofuel from rice straw. This plant was
expected to create around 200 jobs, and there are plans to
build new plants elsewhere.
Straw briquetting is another option that has been
developed in recent years. During 2008, a joint Austri-
an-Egyptian initiative resulted in the establishment of a
straw briquetting plant which was expecting to sell most
product to the EU. A second plant is planned on the basis
of the success of the frst according to Hissewy (2008b). If
successful this may result in further investment.
Locally this could also be used for small-scale industries
such as crop drying and intensive poultry production.
However, the relatively high costs of harvesting and trans-
porting rice straw, and of manufacturing the pellets re-
quired for industrial feedstock, make it uncompetitive with
traditional fuels within Egypt, under current conditions.
Composting
Compost is the main traditional outlet for small-scale
rice producers with an estimated 20 percent of all home-
grown straw being made into compost for local use. With
the reduction of state subsidies for manufactured fertiliz-
ers, small-scale production is likely to increase. Rice straw
compost is also produced on a commercial scale, with a
few new large-scale factories having been constructed in
recent years, and methodologies for production adapt-
ed for local use. There is considerable scope to increase
commercial production, although market feasibility
will depend on location and other factors. Compost has
properties that will help with the reclamation of desert
lands, and extending agricultural areas, which are import-
ant Government objectives. Thus commercial compost
production could also potentially be stimulated by public
investment programmes for land reclamation.
There is a large demand for compost made from agricul-
tural solid waste and the demand is growing. It has been
estimated that the present demand for compost is around
53 million tons annually for the old Nile Valley land and
1.5 million tons a year for reclaimed land. The demand for
compost for reclaimed desert land is expected to reach at
least 30 million tons by 2017. With the present national
production capacity of compost being only about 20.7
million tons per year, there is clearly plenty of scope for
expansion in production for the national market alone.
These statistics suggest there is considerable economic
potential for compost production in Egypt.
Livestock feed
Rice straw is a crucial ingredient of livestock feed during
certain times of the year. Yet less than 25 percent of the
rice straw available is used for livestock production and
that which is produced is at small-scale, on the farm itself,
rather than in bulk, on an industrialised basis. Industrial
processing of straw to manufacture livestock feed offers
clear commercial potential, but more detailed assessment
of costs, potential demand and product development
options would be required.
There has been a signifcant increase in the cost of ani-
mal fodder in Egypt in recent years, due to the growing
population and shortage in areas required for cultivation
of foodstuffs. Given increasing demand for meat and
dairy products nationally, investment in industrial-scale
production is under consideration, thus demand for live-
stock feed is likely to grow, so this potential opportunity
warrants further examination.
As a substrate for the production of food crops,
particularly mushrooms
Small quantities of mushrooms have been produced com-
mercially in Egypt for more than 20 years, but domestic
production has been outstripped by imports. In recent
years, commercial-scale production has begun to expand
in Egypt, with 3-4 large producers now in business and
several new investments planned or underway. Both
37
small-scale and commercial large-scale production is
possible. Reporting from an FAO project has highlighted
the value of small-scale mushroom production units for
farm households, rural communities and village enter-
prises. The MALR/CAER has been promoting small-scale
mushroom production to rural communities for more
than four years, providing the training courses required
and the materials required. Upfront investment costs are
low, and proft margins are clear.
A report by ILO (2010) states that the Egyptian Environmen-
tal Affairs Agency (EEAA) has a programme to promote the
recycling of rice straw as an alternative to open burning,
and that their goal is to generate around 100,000 new jobs,
including through the baling of rice straw and cultivation of
mushrooms in 600 different locations in the Delta region.
So in sum, this sector has the potential to generate
signifcant new market opportunities for large and small
scale enterprises, and many associated jobs, and at the
same time to signifcantly reduce pollution. However,
there has been limited development of the sector, and the
commercial viability of some of these options remains
unproven. This is in part because of limited incentives to
use alternative forms of energy, due to subsidized energy
as discussed above, partly because of the costs of doing
business, and lack of appropriate investment climate and
legal and regulatory framework, and partly because of
immature technologies which have not enabled prices to
fall suffciently to make these options viable. However,
in some technologies there has already been investment
by the private sector, with some apparent success, thus it
seems that with a few improvements to the enabling en-
vironment there may well be the potential for some quick
wins in terms of market growth and job creation in the
industry, along with visible environmental improvements.
4.2 Framework conditions
The waste management and recycling sector in Egypt
generally is not regulated and there is no overarching
solid waste management (SWM) law. Instead, the legal
Working at a Landfill
4 AGRICULTURAL WASTE MANAGEMENT
38
framework is established in many different pieces of leg-
islation. The Ministry of Agriculture and Land Reclama-
tion has the main responsibility for providing oversight
of the agricultural waste sector, in cooperation and
coordination with the Ministry of State for Environmen-
tal Affairs (MSEA) and the EEAA.
Of particular relevance in terms of agricultural waste man-
agement have been the steps taken to limit air pollution
resulting from the burning of agricultural waste. These in-
clude Environmental Law No. 4/1994, which was amended
in Law No. 9/2009, and which stipulates that farmers who
practice rice straw burning can be fned up to L.E. 20,000,
and prohibits dumping of waste in areas other than those
specifed in residential, industrial and agricultural areas
and waterways. The EEAA has established a hotline for the
public to report incidents of burning.
In principle, these changes in policy should strengthen
the potential for a market in agricultural waste products, as
farmers seek alternatives to burning their waste which
should increase the supply of these by-products. While this
may have happened to some extent, in practice these laws
do not appear to be enforced very effectively, which means
that incentives for farmers to collect and sell their waste
products remain weak, and so supply remains limited.
Source: UNEP website: http://www.unep.org/unite/30ways/story.aspx?storyID=44
UNEP’s International Environmental Technology
Centre (IETC) is working with local institutions,
government, business and communities in two pilot
areas in Nepal and Sri Lanka to promote the re-use
of agricultural waste. It has published guidelines
on how to assess waste agricultural biomass – in-
Box 5: Case study on converting
agricultural waste
cluding rice husks, grass, and fruit and vegetable
waste – and to identify appropriate technologies
and business models. Working with principal
partners the National Cleaner Production Centre
in Sri Lanka, and the Society for Environment and
Economic Development in Nepal, UNEP has trained
communities and helped local partners to procure
and install technologies to treat some 2000 tonnes
per annum of rotten vegetables in Nepal, and 1000
tonnes per annum of mixed dry agricultural waste
in Sri Lanka, across the two pilot areas. The projects
have generated compost as well as heat used to dry
limes and other fruit, enhancing livelihoods in one
of Sri Lanka’s poorest areas. This approach is now
being rolled out in other countries.
39
(The traditional practice adopted by farmers in the past
was to store agricultural waste on the roofs of their
houses for use as fuel for their home ovens. However, the
increasing dependence on butane gas stoves has resulted
in a decreased reliance on agricultural waste as a source
of fuel. In addition, current Ministry of Agriculture reg-
ulations ban the storage of agricultural solid waste, as a
measure for combating crop diseases and pests, as well as
preventing fre hazards.)
Thus farmers’ incentives are to dispose of the waste as
cheaply as possible. The ban on the burning of waste – if
properly enforced – would be expected to increase the
dumping of waste. However, transportation costs and fees
for dumping at offcial dumpsites create incentives for
dumping of waste in unauthorised locations. Dumping on
the banks of canals and drains appears to be a common
means of disposal. The often signifcant quantities dumped
at such sites represent a major problem and have to be re-
moved regularly through maintenance work performed by
crews from the Ministry of Water Resources and Irrigation
(MWRI), generating costs for the public budget.
These constraints on the supply side are matched by
constraints on the demand side also arising from the
framework conditions. As already discussed, subsidies
for energy and fuel drive down incentives for alternative
fuel sources, and subsidies of fertilizer have reduced
demand for compost made from agricultural waste. The
removal of these subsidies would be expected to have a
signifcant impact on demand for – and thus prices paid
for – agricultural waste that can be converted into ener-
gy, fuel or compost.
Even in the absence of subsidy reduction, export mar-
kets may provide some potentially proftable market
opportunities using agricultural waste inputs as outlined
above, and this suggests a potentially important role
for MTI in developing this sector. Some private players
are already beginning to capitalise on these opportuni-
ties and going forward it seems likely that there will be
increased demand for agricultural waste from a variety
of sources. Thus a more strategic approach to managing
this sector at the policy level may be benefcial, cutting
across government departments, in order to provide
the enabling conditions for market development, based
on discussions with the private sector about potentially
lucrative market opportunities and the main constraints
to their development, and thus to maximise the scope for
industrial development, market opportunities for SMEs,
and job creation.
4.3 Policy recommendations and
economic considerations
The most obvious way to create a more enabling envi-
ronment for the development of the agricultural waste
sector would be to reduce energy and fuel subsidies,
and to a lesser extent fertiliser subsidies, which would
generate increased demand for alternative sources of
fuel, energy and compost, and thus stimulate demand for
agricultural waste as an input.
Another way would be to enforce more strictly the ban on
the burning or unauthorised dumping of agricultural waste,
which would increase the supply. In combination with this,
the removal of fees on authorised dumping sites in agricul-
tural areas could be one way of increasing their use, and the
cost of provision by local government could potentially be
recouped by the sale of that accumulated waste for industri-
al purposes. While farmers would have to bear the increased
costs of collection and removal of waste products, they
would at least not have to bear the cost of dumping, and may
in fact be able to generate revenue, if the industrial users are
willing to pay for the waste. They may be willing to do this if
accumulating the waste all in one place suffciently reduces
the cost of sourcing this as an input to industrial processes,
such that it becomes economic to pay for those inputs. This
is likely to be dependent on economies of scale, transporta-
tion costs and the potential to build processing plants near
the authorised dumpsites. Thus the optimal location and
number of authorised dumpsites could also be investigated.
Different models of public and private provision of these
dumpsites could also be explored. Incentives could be cre-
4 AGRICULTURAL WASTE MANAGEMENT
40
Man eating sugar cane during harvest
41
ated e.g. in the form of free land to be given to developers to
encourage the establishment of waste management plants.
In addition there may be scope to scale-up or develop
further some of the pilot projects that have been initiated
to explore uses of agricultural waste (e.g. for briquetting,
gasifcation, etc.), and to expand them or undertake new
public/private partnerships in order to ameliorate some
of the risks private players would face in developing new
markets and technologies in light of considerable uncer-
tainty about future market demand.
There is also scope to continue to invest in R&D, and to
support the adaptation and pilot testing of new technol-
ogies, and to promote networks and linkages between
those already involved in R&D and market players, in
order to maximise effciency and progress in terms of
bringing new technologies to market. Feasibility studies
and market assessments could also assist in this regard.
The potential could also be explored as to whether these
industries could be eligible to receive different forms of
climate fnance e.g. carbon credits through the Clean De-
velopment Mechanism, or grants through mechanisms
such as the Global Environment Facility.
Currently there seems to be little coordination and
shared interest in the development of this market.
Separate parallel investments are underway, and there
appears to have been little analysis of the impact of
potentially competing demands for agricultural waste,
how that might evolve, what impact that will have on
prices, and what that means for the future viability of
the various different industries that could potentially be
developed now.
Indeed there seems to be generally limited information
available about the agricultural waste sector in Egypt, so
there is a case to undertake more research, data gathering,
and analysis, in order to inform the development of a
strategy. This would also help to overcome information
asymmetries which may prevent market development.
In addition, this information could provide the basis for
proactively seeking domestic or foreign investment in the
sector. The FAO recommends that a useful start could be
made by accurately confrming the quantities of agricul-
tural waste that are likely to be available on an annual
basis. Without reliable information of this kind, the
potential market size remains open to conjecture and esti-
mation, and this uncertainty may undermine investment.
While the Ministry of Agriculture and Land Reclamation
(MALR) leads on many aspects of this issue, it is clear that
cross-departmental collaboration is needed to support
the industrial development opportunities that agricul-
tural waste offers. While MALR’s main focus is inevitably
agricultural and rural development, the role of MTI
should be to consider industrial and trading opportu-
nities arising from agricultural waste, to liaise with the
private sector to understand the market opportunities
and constraints, and to work with other government
departments including MALR to tackle these constraints,
identify priority areas for reform and support, and
develop an institutional and regulatory framework that
effectively underpins market development.
The MTI provides national services that link investors
with manufacturers and traders, and has responsibility
for state policy that encourages the expansion of indus-
trial development and the sustainable exploitation of na-
tional resources. It can do this by promoting investment,
ensuring quality, providing incentives, information and
infrastructure, and channelling national effort. Thus it is
well positioned to play a role in promoting awareness of
the industrial opportunities associated with agricultural
waste, develop a market development strategy, and to
help establish a network of relevant stakeholders, in-
cluding the agribusiness industry, to discuss and develop
a strategy for the sector, and to make linkages between
different parts of the supply chain, in order to stimulate
market development. Establishing a communication
strategy and action plan to raise awareness and commu-
nity participation will also be an important part of the
overall strategy.
4 AGRICULTURAL WASTE MANAGEMENT
42
In addition, there is a need to develop the human capital
and skills needed to fulfl labour requirements for the
sector. The ILO points to a number of labour and training
needs in agriculture waste management:
1. Drivers of tractors and trailers used in the feld: train-
ing is required in maintenance of tractors and trailers,
driving skills, occupational safety, communication skills.
2. Technicians for the operation of compressors:
training is required in operation and maintenance of
compressors, occupational safety etc.
3. Loading workers: training is required in loading trail-
ers, communication skills, occupational safety.
4. Technicians working in rice straw recycling: training
is required in composting techniques and handling,
occupational health and safety.
Discussion with private players to identify any skills gaps
and consider the best way to build these skills is recom-
mended, for example to ascertain whether the private
players can build the skills through on-the-job training,
or whether publicly supported schemes are needed.
There are many different ways that government could
stimulate market development through artifcial incen-
tives e.g. tax breaks, land concessions, export subsidies
etc. However, the rationale for these kinds of incentives
needs to be considered carefully, and only once a clearer
analysis has been undertaken of the potential viability of
the different markets even in the absence of these incen-
tives. There is little point in stimulating the development
of a sector through artifcial incentives if it is unlikely
to be sustainable in the longer term in absence of such
support, as such incentives would need to be quite
large to incentivise private investment in an otherwise
unviable sector. These incentives are usually costly and /
or economically ineffcient and this implies that efforts
could be more effectively targeted at sectors where there
are real market opportunities.
Artifcial incentives such as these are best used to stim-
ulate initial market development and / or overcome
market failures relating to uncertainty, but should ideally
not be established with a view to maintaining them in
the long term – unless this is an explicit decision taken
to overcome other market failures that cannot be tackled
at source. However, a focus on improving the enabling
environment, understanding the market and providing
better information, and promoting coordination across
the different players – thus tackling market failures at
source – should be the frst priorities.
Small-scale livestock producers currently dominate
market demand for rice straw, so if and when industri-
al-scale straw processing industries begin to dominate
the market, driving up the price of rice straw, then this
will likely increase the costs of those farmers, and may
reduce their access to low-cost feed. This combined with
the possible increased use and production of compost,
which is likely to substitute for organic fertilisers based
on farm animal manure, may result in a double blow for
livestock farmers. Some form of protection or compensa-
tion for these farmers may thus be considered desirable
or politically expedient.
43
Long term strategies
• Through dialogue with the private sector, analyse
industrial and trading opportunities arising from ag-
ricultural waste, and undertake market assessment
/ feasibility studies to understand the opportunities
and constraints.
• Work with other government departments in-
cluding MALR to tackle these constraints, identify
priority areas for reform and support, and develop
an institutional and regulatory framework that
effectively underpins market development.
• Establish a network of relevant stakeholders,
including the agribusiness industry, to discuss and
develop a strategy for the sector, and to make link-
ages between different parts of the supply chain, in
order to stimulate market development.
Box 6: Top priorities for MTI to promote the
agricultural waste management industry
Potential quick wins
• Through public-private dialogue, explore the fea-
sibility of creating incentives for private developers
to establish private waste management plants.
• Establish a communication strategy and action
plan to raise awareness and community participa-
tion in existing market opportunities.
4 AGRICULTURAL WASTE MANAGEMENT
44
There is signifcant potential to achieve green growth
in a number of sectors within Egypt. This paper has dis-
cussed a number of specifc green growth opportunities,
all of which exhibit clear potential to generate economic,
social and environmental gains. The existing framework
conditions within Egypt – particularly fossil fuel subsi-
dies – are undermining the development of all three at
this stage, but with the right conditions in place, much
could be achieved by private players in the development
of these markets, without the need for substantial public
funding. In the absence of major or swift reforms to fossil
fuel subsidies, there are other steps that could be taken
to generate the incentives needed to underpin market
development.
Thus the frst priority is to create the incentives that will
motivate private investment, and make it fnancially
viable. This could be through the removal of disincen-
tives (e.g. fossil fuel subsidies), or through explicit public
funding, but often incentives can also be created in other
ways i.e. through innovative use of ‘carrots’ to reward
businesses demonstrating appropriate behaviours.
In parallel to this, it seems there is a strong need within
the Egyptian context to raise awareness amongst the
public and business sector, about both the environmen-
tal costs of ‘business as usual’, and the potential market
opportunities and fnancial, economic and social benefts
of new green solutions and technologies. Thus there is a
need for education and media campaigns, consultation
processes, public / private dialogue, and civil society
engagement strategies.
Once demand and awareness has been created, the
priority will switch to building local capacity and skills in
order to overcome any supply constraints and thus max-
imise the benefts to Egypt in terms of growth opportu-
nities and job creation. However, where market demand
is strong, private players may be expected to begin to
respond in a more concerted way, thus ameliorating
some of these supply side constraints themselves.
5 Conclusions
A coherent, joined up government strategy is ideally
needed to achieve these objectives most effectively, set-
ting out a clear vision for the future, and an action plan
specifying the targets, timeframes, resources, responsi-
bilities (incl. public sector vs. private sector), and success
indicators.
The current political uncertainty is an enormous dis-
incentive to private investment, so the sooner greater
clarity is achieved on the future Government’s economic
stance and policy direction, the better. However, it is
clear that environmental issues are not currently top
of the political agenda within Egypt. Nonetheless, once
Egypt has a new Government in place, perhaps with
a much stronger mandate to make transformational
changes, the potential to make progress on these issues
may be stronger than it has ever been before.
Woman washing wheat before grinding ?
46
References
Abaza, H, N. Saab and B. Zeitoon (2011), “Arab
Environment 4. Green Economy: Sustainable Trans -
ition in Changing Arab World”, Beirut: Arab Forum
for Environment and Development.
Bushra, M (2000), “Policy and Institutional Assessment
of Solid Waste Management in Five Countries”, UNEP.
Denker, A (2011), “Partnership Landscape Analysis
Egypt: Promoting Green Growth in Cooperation with
the Private Sector”, GIZ.
Egyptian National Competitiveness Council (2010),
“Green Growth: A Vision for Tomorrow”, Cairo: ENCC.
Elsobki, M; Wooders, P; Sherif, Y (2009), “Clean Energy
Investment in Developing Countries: Wind Power in
Egypt”, IISD.
EUTech (2009), “Promotion of Energy Effciency in
Egypt through Financial Institutions”, prepared for KfW.
GTZ & MTI (2009), “The Prospects for the Renewable
Energy Sector in Egypt”, undertaken on behalf of the
Private Sector Development Program.
GTZ (2009), “Solar Thermal Application in Egypt, Jordan,
Lebanon, Palestinian Territories, Syria and Tunisia:
Technical Aspects, Framework Conditions and Private
Sector Needs”, Workshop Report.
International Resources Group (2005), “Alternative
Methods for Solid Waste Management and Treatment
and Disposal of Wastewater”, Report No. 7, on behalf of
Ministry of Water Resources and Irrigation & USAID.
ILO (2010), “Skills for Green Jobs in Egypt”, EcoConServ
Environmental Solutions.
Liu, F; Meyer, A.S.; Hogan, J.F (2010), “Mainstreaming
Building Energy Effciency Codes in Developing
Countries”, World Bank Working Paper No. 204.
Selim, T (2009), “Egypt, Energy and the Environment”,
Adonis & Abbey Publishers, London.
Steele, P; El-Hissewy A; & Badawi A (2009), “Technical
Manual: ‘Agro-Industrial Use of Rice Straw’ Exploring
opportunities for making better use of rice residues in
Egypt”, FAO/MALR.
Suding, Dr. P (2009), “Energy Effciency Policy in
Egypt – Strategic Issues and Short Term Options”, Draft
Memorandum, JCEE / GTZ.
SWEEP-Net (2010), “Country Report on Solid Waste
Management Egypt”.
UNEP & ILO (2008), “Green Jobs: Towards decent work in
a sustainable, low-carbon world”.
UNEP (undated), “Waste Not, Want Not: Converting ag-
ricultural biomass waste into energy”, http://www.unep.
org/unite/30ways/story.aspx?storyID=44.
Wenzel, K (undated), “MED-ENEC: The Implementation
Gap for Energy Effciency in Buildings. Experiences from
the MENA-region”.
World Bank (2011), “Middle East and North Africa
(MENA) Region Assessment of the Local Manufacturing
Potential for Concentrated Solar Power (CSP) Projects”,
Ernst & Young, Fraunhofer, ESMAP.
Published by
Deutsche Gesellschaft für
Internationale Zusammenarbeit (GIZ) GmbH
Registered offces
Bonn and Eschborn, Germany
Sector Programm Sustainable Economic Development
Friedrich-Ebert-Allee 40 Dag-Hammarskjöld-Weg 1-5
53113 Bonn 65726 Eschborn, Germany
T +49 228 44 60-0 T + 49 61 96 79-0
F +49 228 44 60-17 66 F + 49 61 96 79-11 15
[email protected]
www.giz.de
Authors
Karen Ellis, with inputs from Smita Nakhooda
Overseas Development Institute, London
Design and layout
Schumacher. Visuelle Kommunikation
www.schumacher-visuell.de
Printed by
Top Kopie GmbH, Frankfurt
Printed on FSC-certifed paper
Photo credits
Page 1: Stocktrek Images/gettyimages, Page 12: Paul Langrock/Zenit/laif,
Page: 26 Benoit Decout/REA/laif, Page 34: Kirchgessner/laif, Page 37: LookatSciences/laif,
Page 40: Preau/Hemis/laif, Page 45: Roberto Caccuri/Contrasto/laif,
Page 17, 23, 30, 32: Thomas Imo/photothek
As at
November 2011
GIZ is responsible for the content of this publication.
On behalf of
Federal Ministry for Economic Cooperation
and Development (BMZ);
Division for development education and information
Addresses of the BMZ offces
BMZ Bonn BMZ Berlin | im Europahaus
Dahlmannstraße 4 Stresemannstraße 94
53113 Bonn, Germany 10963 Berlin, Germany
T +49 228 99 535-0 T +49 30 18 535-0
F +49 228 99 535-3500 F +49 30 18 535-2501
[email protected]
www.bmz.de
doc_195944262.pdf
The study has been commissioned by GIZ, with a view to assisting the Egyptian Ministry of Industry and Foreign Trade (MTI), and the Egyptian-German Private Sector Development Programme (PSDP) on behalf of BMZ, to further promote green growth and green job creation in Egypt.
Green Growth Opportunities
and Requirements in Egypt
Karen Ellis, with inputs from Smita Nakhooda
published by:
Contents
Executive summary S. 4
Suggested priorities for MTI S. 8
1 Introduction and framework for the study S. 10
2 Renewable energy generation and renewable energy appliances S.12
2.1 The opportunity S. 12
2.2 Framework conditions S. 15
2.3 Policy recommendations and economic considerations S. 18
3 Construction Sector: Green Buildings S. 26
3.1 The opportunity S. 26
3.2 Framework conditions S. 26
3.3 Policy recommendations and economic considerations S. 30
4 Agricultural waste management S. 34
4.1 The opportunity S. 34
4.2 Framework conditions S. 37
4.3 Policy recommendations and economic considerations S. 39
5 Conclusions S. 44
References S. 46
Boxes
Box 1 Case study on PROSOL S. 20
Box 2 Top priorities for MTI to promote the renewable sector S. 25
Box 3 Case Study on Green Buildings S. 29
Box 4 Top priorities for MTI to promote the green construction industry S. 33
Box 5 Case study on converting agricultural waste S. 38
Box 6 Top priorities for MTI to promote the agricultural waste management industry S. 43
4
Executive summary
The team identifed three broad and inter-related sectors
of focus for this study: (1) Renewable energy generation
and renewable energy applications; (2) the construction
sector; and (3) the agricultural waste sector. These are
all areas which would generate signifcant potential for
green growth and jobs, if the right framework conditions
were put in place. This could be achieved largely through
private sector action, at limited cost to the taxpayer, if
the enabling conditions were put in place through an ap-
propriate policy framework and supportive institutional
environment.
In the renewable energy generation and appliances
section, the report discusses the potential for wind power
and solar power (photovoltaics, solar water heaters and
concentrated solar power), both of which have consid-
erable potential within Egypt due to its geographical
characteristics. The wind power sector is the most de-
veloped, and government policy is promoting this sector
most strongly. Solar water heaters also provide a signif-
cant opportunity within Egypt – a possible low hanging
fruit – linked to the construction of green buildings
and retroftting of existing buildings. Photovoltaics and
concentrated solar power applications are currently less
developed and further from achieving market viability.
Developing the renewables sector will be important for
Egypt’s energy security going forward, as the the coun-
try’s stock of fossil fuels is being depleted, and national
demand for energy is rising fast. It also holds the prom-
ise of generating many jobs, and becoming a lucrative
export market for Egypt.
The objective of this study is to identify the key
opportunities for green growth in Egypt, discuss the
framework conditions necessary for achieving them, and
make policy recommendations. Green growth opportu-
nities are defned as those which achieve the triple goals
of (i) economic growth, (ii) social inclusivity, and (iii)
environmental sustainability or improvement. The social
dimension is addressed by prioritising these opportu-
nities in terms of their potential to generate jobs, thus
allowing the benefts of these new opportunities to be
shared in a socially inclusive manner.
The study has been commissioned by GIZ, with a view to
assisting the Egyptian Ministry of Industry and Foreign
Trade (MTI), and the Egyptian-German Private Sector
Development Programme (PSDP) on behalf of BMZ, to
further promote green growth and green job creation in
Egypt.
The aim of the study was to identify a small number
of sectors where there are signifcant opportunities for
green growth and job creation, that can potentially be
achieved in a reasonably short time frame, and at rela-
tively low cost to the public budget. In other words, to
identify low hanging fruit, and explain in practical terms
how they can be harvested.
This is crucial given the current juncture within Egypt,
where public resources are very tight, and where employ-
ment generation is a priority for a transition government
facing enormous public pressure to deliver new polit-
ical freedoms and economic opportunities. Although
environmental concerns are not currently high on the
political agenda, and nor is there much awareness about
the problem amongst the public, it is nonetheless a seri-
ous looming problem that will need to be tackled within
Egypt sooner rather than later.
5 EXECUTIVE SUMMARY
The most obvious recommendation to support market
development in the renewables sector is the phased
reduction and removal of fossil fuel subsidies. However,
even in the absence or slow implementation of subsidy
reduction, it should be possible to make progress in de-
veloping the renewables sector, through improvements
in the enabling environment and other framework con-
ditions governing the sector. The proposed Unifed Elec-
tricity Law will help to create better framework condi-
tions in the sector to support private sector investment.
But what is ideally needed is a planned and determined
shift to renewable energy: a clear, long term, holistic
implementation plan for the development of the sector,
which gives consideration to private sector incentives,
likely developments in both domestic and international
demand for renewables, and technological innovation,
and which considers how the whole supply chain can be
developed to generate a competitive industry along with
broad based growth and job generation. Specifc recom-
mendations include:
1. Public education of benefts and public-private
dialogue in order to mobilise support for the required
transformation.
2. Use of economic incentives to stimulate private
investment e.g. procurement policies, differential
pricing and taxation to promote renewable technolo-
gies, fnancing mechanisms etc.
3. Use of licensing requirements for industrial energy
users to incentivise use of renewable energy.
4. Use of downstream regulation e.g. new building
codes, to incentivise or require use of technologies
such as solar water heaters (as discussed further in
the next section).
5. Investment in connections of renewable energy gen-
eration installations to the grid, potentially through
public / private partnerships.
6. In the longer term, investment in infrastructure to
facilitate the export of renewable energy.
7. Development of a clear regulatory framework for the
renewable energy industry.
8. Policies to promote local production of inputs for
renewable energy technologies.
9. Capacity building and development of the SME sec-
tor, and new fnancing mechanisms.
10. Increased funding and support for energy R&D, and
mechanisms to facilitate coordination and commer-
cialisation of R&D efforts.
11. Development of necessary skills and accredited train-
ing courses.
12. Accessing carbon market mechanisms such as the
Clean Development Mechanism.
In the section on the construction sector, the
focus is on green buildings, and the potentially large job
creation potential associated with green construction
and retroftting of existing buildings with energy eff-
cient appliances such as solar water heaters. Many of the
possible energy effciency improvements can quickly pay
for themselves in terms of reduced energy bills. However,
fossil fuel subsidies are again undermining incentives to
undertake green construction within Egypt. Nonetheless,
incentives for green construction could be created in
other ways. Specifc recommendations include:
1. The development of a green construction strategy, as
proposed in the Egyptian Competitiveness Report, by
convening public and private sector representatives
from the construction industry, to develop a plan
and establish the standards and incentives for green
construction.
6
2. The continuation / strengthening of the system of
progressive electricity tariffs dependent on relative
energy effciency, in order to incentivise energy eff-
ciency improvements. The introduction of a progres-
sive tariff for gas pricing also.
3. Enhancing enforcement of building codes and re-
viewing their achievability.
4. Performance ratings and labelling schemes, accom-
panied by a marketing drive and media campaign to
raise consumer awareness.
5. The introduction of fscal or other fnancial incen-
tives to incentivise energy effciency.
6. The introduction of energy effciency requirements
into Government procurement of construction
projects.
7. Working with fnancial institutions to improve access
to credit for the upfront costs of energy effciency
measures.
8. Market studies, demonstration projects and aware-
ness raising campaigns for both the industry and
consumers.
9. Incorporation of energy effciency into higher edu-
cation programmes and increased R&D expenditure
and network building between existing R&D players.
10. Working with the private sector to identify where
there are gaps in the availability of suitable materials
and technologies within Egypt.
11. Working with SMEs to help them comply with stan-
dards.
12. Investigating international sources of green climate
fnance that may help to underpin the necessary
investments.
In the section on agricultural waste management,
the report focuses on the potential to ameliorate one
of the most visible of Egypt’s environmental problems,
the ‘Black Cloud’ that engulfs much of Cairo at certain
times of year, as a result of the burning of agricultural
waste. There are multiple potential uses of this waste,
including conversion into energy in different forms, the
production of compost, the production of animal feed,
and as a substrate for the production of food crops such
as mushrooms, all of which could generate signifcant job
and export opportunities.
Once again, the most obvious way to create a more en-
abling environment for the development of the agricul-
tural waste sector would be to reduce energy and fuel
subsidies, and to a lesser extent fertiliser subsidies, which
would generate increased demand for alternative sources
of fuel, energy and compost, and thus stimulate demand
for agricultural waste as an input. Other recommenda-
tions include:
1. Enforcing more strictly the ban on the burning or
unauthorised dumping of agricultural waste, which
would increase the supply of the raw material.
2. Consideration of the optimal location and number
of authorised dumpsites and exploration of differ-
ent models of public and private provision of these
dumpsites, and associated economic incentives.
3. Pilot projects to explore the fnancial viability of the
different potential uses of agricultural waste, and a
more coordinated approach to investment in pilot
projects.
4. Investment in R&D, and promotion of networks and
linkages to facilitate commercialisation.
5. Assessment of the potential to access different forms
of climate fnance for such projects.
7 EXECUTIVE SUMMARY
6. Research, data gathering, and analysis, in order to
inform the development of a strategy.
7. Feasibility studies, investigation of export markets
and matchmaking between market participants.
8. Discussion with market players to identify skills gaps
and ways to plug them.
Suggested priorities for MTI specifcally, are listed in the
box below.
Generally speaking, in order to encourage green
growth across all relevant sectors, the frst priority is to
create the incentives that will motivate private invest-
ment, and make it fnancially viable, which can either
be through the removal of disincentives (e.g. fossil fuel
subsidies), through explicit public funding, or through
innovative use of ‘carrots’ to reward businesses demon-
strating appropriate behaviours (which are better than
‘sticks’ which are harder to enforce). In parallel to this,
there is a strong need within the Egyptian context to
raise awareness amongst the public and business sector,
about both the environmental costs of ‘business as usual’,
and the potential market opportunities and fnancial,
economic and social benefts of new green solutions and
technologies. Thus there is a need for education and me-
dia campaigns, consultation processes, public / private
dialogue, and civil society engagement strategies.
Once demand and awareness has been created, the
priority will switch to building local capacity and skills in
order to overcome any supply constraints and thus max-
imise the benefts to Egypt in terms of growth opportu-
nities and job creation. However, where market demand
is strong, private players may be expected to begin to
respond in a more concerted way, thus ameliorating
some of these supply side constraints themselves.
A coherent, joined up government strategy is ideally
needed to achieve these objectives most effectively, set-
ting out a clear vision for the future, and an action plan
specifying the targets, timeframes, resources, responsi-
bilities (incl. public sector vs. private sector), and success
indicators.
To conclude, there is signifcant potential to achieve
green growth in a number of sectors within Egypt. How-
ever, the current political uncertainty is an enormous
disincentive to private investment, so the sooner greater
clarity is achieved on the future Government’s econom-
ic stance and policy direction, the better. However, it is
clear that environmental issues are not currently top of
the political agenda within Egypt, and public awareness
of the impending problems is very limited. Nonetheless,
once Egypt has a new Government in place, perhaps
with a much stronger mandate to make transformational
changes, the potential to make progress on these issues
may be stronger than it has ever been before.
8
Renewables sector
Long term goals
• Push for: fossil fuel subsidy removal; implementa-
tion of the National Electricity Law; improved regu-
latory framework for renewables; and development
of a cross-Ministerial strategy to develop the sector.
• Explore public/private partnership framework to
invest in connections of renewable energy genera-
tion installations to the grid.
Potential quick wins
• Take steps to reduce disincentives for foreign
investment in renewables incl. speeding up the
investment process, creating a one stop shop for
potential investors, and signalling welcome to
foreign investors.
• Introduce licensing requirements or ‘carrots’ for
industrial energy users to incentivise use of renew-
able energy.
• Undertake awareness raising activities, develop
quality standards, and support the provision of
accompanying training for local SMEs so they can
better serve domestic renewables industry.
Suggested priorities for MTI
Green construction sector
Long term goals
• Push to build on current dialogue approaches pur-
sued by EGBC, in order to develop a green construc-
tion strategy, review and adjust existing standards,
strengthen enforcement, and develop performance
rating / labelling schemes.
• Work with the private sector to identify where there
are gaps in the availability of suitable materials and
technologies within Egypt, and explore the possibil-
ity to promote the development of these industries
locally.
Potential quick wins
• Work with fnancial institutions to improve access
to credit for the upfront costs of energy effciency
measures, or to provide subsidised credit pro-
grammes or credit guarantee schemes.
• Work through schemes designed to support SMEs
and professionals involved in the sector, to raise
awareness of market opportunities and build rele-
vant skills and capacity, including helping SMEs to
comply with standards.
9
Suggested priorities for MTI
Agricultural waste management
industry
Long term strategies
• Through dialogue with the private sector, analyse
industrial and trading opportunities arising from ag-
ricultural waste, and undertake market assessment
/ feasibility studies to understand the opportunities
and constraints.
• Work with other government departments in-
cluding MALR to tackle these constraints, identify
priority areas for reform and support, and develop
an institutional and regulatory framework that
effectively underpins market development.
• Establish a network of relevant stakeholders,
including the agribusiness industry, to discuss and
develop a strategy for the sector, and to make link-
ages between different parts of the supply chain, in
order to stimulate market development.
Potential quick wins
• Through public-private dialogue, explore the feasi-
bility of creating incentives for private developers to
establish private waste management plants.
• Establish a communication strategy and action plan
to raise awareness and community participation in
existing market opportunities.
EXECUTIVE SUMMARY
10
The objective of this study is to identify the key opportu-
nities for green growth in Egypt, discuss the framework
conditions necessary for achieving them, and make policy
recommendations.
Green growth opportunities are defned as those which
achieve the triple goals of (i) economic growth, (ii) so-
cial inclusivity, and (iii) environmental sustainability or
improvement. Green growth is often construed as a more
positive agenda than sustainable development, as it focuses
attention less on the trade-off between economic and en-
vironmental goals, and more on the economic opportuni-
ties that are generated by efforts to improve environmental
performance. It seems likely that there will sometimes be
trade-offs between economic and environmental goals, but
that there will also be many occasions when these goals
will be mutually consistent and reinforcing. These will be
defned as ‘green growth opportunities’ for the purposes of
this study. The social dimension is addressed by prioritising
these opportunities in terms of their potential to generate
jobs, thus allowing the benefts of these new opportunities
to be shared in a socially inclusive manner.
It is often argued that achieving green growth requires
transformative change in the way that economies are run
– a signifcant departure from ‘business as usual’. In other
words, the concept and objective of green growth needs to
be ‘mainstreamed’ into all aspects of economic policymak-
ing. It also requires that the private sector itself recognises
(i) the threats to their existing business models posed by
environmental challenges, and (ii) the new market oppor-
tunities and scope to achieve improved competitiveness
associated by investing in new ‘greener’ business models
and technologies. It is argued that if the private sector in
a particular country does not respond to these risks and
opportunities, perhaps because of lack of awareness or
capacity, it will be competitively disadvantaged in the long
term, as other frms develop more sustainable business
models and gain a frst mover advantage. Public policy has
an important role to play in incentivizing and facilitat-
ing the private sector to respond to these challenges in a
timely way.
The study has been commissioned by GIZ, with a view to
assisting the Egyptian Ministry of Industry and Foreign Trade
(MTI), and the Egyptian-German Private Sector Development
Programme (PSDP) on behalf of BMZ, to further promote
green growth and green job creation in Egypt.
MTI’s primary objectives are to promote sustainable
economic growth and employment generation, particu-
larly through the promotion of small and medium-sized
enterprises (SMEs), and the development of the local
manufacturing industry. Much of PSDP’s work has focused
on improving competitiveness, particularly of SMEs, and
has operated mainly at the meso and micro level. GIZ more
broadly already has a number of programmes in Egypt
which could contribute to green growth.
In addition, there has been quite a lot of Government-led
work designed to promote the development of sectors
which may contribute to green growth. Thus there is a
good amount of existing work and analysis to draw on.
This study is designed to help show how linkages might
be made between the meso / micro level of engagement
that has been where most PSDP activity has been located
to date, and the macro level framework conditions which
ultimately guide the incentives facing private sector actors
in Egypt.
The aim of the study was to identify a small number of
sectors where there are signifcant opportunities for green
growth and job creation, that can potentially be achieved
in a reasonably short time frame, and at relatively low
cost to the public budget. In other words, to identify low
hanging fruit, and explain in practical terms how they can
be harvested.
This is crucial given the current juncture within Egypt,
where public resources are very tight, and where employ-
ment generation is a priority for a transition government
facing enormous public pressure to deliver new political
freedoms and economic opportunities.
Although environmental concerns are not currently high
on the political agenda, nor is there much awareness about
1 Introduction and framework
for the study
11
the problem amongst the public, it is nonetheless a serious
looming problem that will need to be tackled within Egypt
sooner rather than later.
Building on initial suggestions coming out of previous
engagement and consultation processes, as well as a review
of the existing literature and a stakeholder consultation,
the team identifed three broad and inter-related sectors of
focus for this study: (1) Renewable energy generation and
renewable energy applications; (2) the construction sector;
and (3) the agricultural waste sector.
These sectors were chosen on the basis that they:
• had signifcant potential to generate green growth
and jobs;
• could make a clear contribution to environmental
improvement; and
• that this could be achieved largely through private
sector action, at limited cost to the taxpayer, if the
enabling conditions were put in place through an
appropriate policy framework and supportive institu-
tional environment.
Initial ideas for the sectors of focus were drawn from pre-
vious work by GIZ, by suggestions from stakeholders con-
sulted, and by reviewing the literature. This was narrowed
down to three sectors on the basis of our own (qualitative)
economic analysis in each case of:
• the size of the potential market opportunity;
• the labour intensity of production in that market;
• the availability of the necessary qualifcation base
(determining potential even if not existing skills) in
the local labour force;
• the main barriers to market development, and the
extent to which they could be overcome reasonably
rapidly through policy and institutional reform; and
• the associated costs and trade-offs which also deter-
mine political feasibility.
The next three sections consider each of these sectors in
turn, discussing the opportunities associated with them,
the current framework conditions governing them, and
policy recommendations that could help to unlock those
green growth opportunities. Framework conditions anal-
ysed include:
• The overarching legal and regulatory framework
within which the sector operates, including Ministe-
rial oversight and relevant Government policies and
strategies for that sector;
• Important policy determinants e.g. laws, regulations,
standards, subsidies, taxes, investment rules etc.
• The political economy of potential policy reform;
• The institutional framework e.g. regulatory bodies,
trade associations, voluntary standards, public/pri-
vate partnerships, donor engagement;
• The current state of demand and supply, both inter-
nationally and locally, and how that might evolve in
future;
• Local supply conditions and challenges;
• Skills requirements and availability;
• Knowledge / awareness amongst relevant players and
cultural factors;
• Any additional market failures identifed and not yet
covered under previous headings.
INTRODUCTION AND FRAMEWORK FOR THE STUDY
12
2.1 The opportunity
There are a range of specifc green growth opportunities
arising in this sector. Renewable energy generation –
both wind and solar – is hailed as an area of strong po-
tential comparative advantage for Egypt as a result of its
geography, with high wind and sun potential. However,
energy subsidies which are keeping fossil fuels cheap, are
prohibiting the development of the renewables sector,
which has fallen behind in terms of size and perfor-
mance compared with other countries.
If the renewable energy sector can be developed in
Egypt this presents opportunities for jobs in production,
inputs, parts, maintenance, servicing and other related
industries. It can also generate export revenues given the
growing global demand for renewable energy.
The wind energy sector
Maturing wind generation technology, increasing oil
prices, and a desire in many countries to reduce reliance
on fossil fuels, (bolstered by increasing fnancial incen-
tives, emissions reductions commitments, and a desire
for energy security), is resulting in fast growing demand
and investment in installed capacity in wind generation
at the global level. Egypt has a strong economic wind
energy potential, (ranked ffth in the countries of the
EU-MENA region) due to its geography, particularly
within the Gulf of Suez and the western desert region.
However, Egypt’s investment in wind energy generation
is very low relative to other countries within the region;
total current capacity is 550MW, but it is estimated that
the Gulf of Suez alone has a potential for 20,000MW
of wind capacity. The contribution of wind to overall
national electricity production is still less than 1%. The
wind generation sector is currently almost completely
state-run and donor funded.
However, Egypt’s Renewable Energy Strategy stipulates
that 20% of total electricity generation will come from
renewables by 2020, including 12% from wind and 8%
2 Renewable energy generation
and renewable energy appliances
from hydropower (MOEE, 2010). If policies are put in
place to implement this goal, this would generate signif-
icant investment in wind energy. The observed positive
market reaction to the announcement of plans to in-
crease the contribution of wind energy to the electricity
grid is a clear indication that the Egyptian private sector
is willing and able to react to clear signals.
Technologies are maturing as a result of large scale
implementation in the last few years, and there are now
new business opportunities, capitalising on expected
increases in electricity tariffs and a more liberalised
electricity market. There are opportunities for both small
stand-alone wind turbines, and also larger wind-parks
which can be connected to the national grid.
Many jobs may be generated up and down the supply
chain for the wind energy generation industry, from
local manufacturing of parts, through to operation and
maintenance (O&M). Local manufacturing industry is
now beginning to develop to support the wind genera-
tion industry. The private Sewedy Group has established
El Sewedy for Wind Energy Generation (SWEG) which is
building capacity through alliances with international
suppliers. It has developed some local manufacturing ca-
pability including in wind-turbines and tower manufac-
ture. Local manufacturers are also able to supply cables
and transformers. All of which can generate local jobs.
Currently no O&M companies exist in Egypt, as these
activities are undertaken by the New and Renewable
Energy Authority of Egypt, (NREA), though SWEG has
plans to establish an O&M company. Existing wind farms
have been breaking down, and there has been a serious
shortage of skills within Egypt to maintain them.
The solar energy sector
Egypt is one of the world’s most attractive sites for
solar energy thanks to ample sunlight and proximity to
existing and potential energy grids. Solar energy can be
harnessed through various technologies including:
Construction of Africa’s first solar thermal power station with parabolic trough technology, Kuraymat ?
13
14
1. Photovoltaic (PV) technology that produces electrici-
ty directly from solar energy;
2. Solar heaters;
3. Concentrated Solar Power (CSP) systems, which pro-
duce steam that can be used for industrial purposes,
for water desalination, or in a turbine to produce
electricity.
These need to be considered separately.
Photovoltaic technology is expensive to install, and cur-
rently not competitive with wind power generation, though
as technology develops it could become more competitive
in future. Egypt has high PV potential, which is as yet largely
unexploited. No grid-connected PV generation systems
currently exist in Egypt. Rather PV technology is used in
specifc stand-alone applications (e.g. solar powered mobile
telephone towers) or in unconnected power generation
systems, where it is used for parts of an industrial load (e.g.
lighting). It is also the main power supply for some villages,
as part of demonstration projects funded by donor agencies.
A feed-in tariff for PV would help to develop the market, but
it is not expected to be introduced until the tariffs for wind
energy have been established.
Local manufacturing of PV technologies is very limited
and there is heavy reliance on international suppliers.
However, the industry generates some job opportuni-
ties for local service providers and installers. A study on
local content potential for PV and wind energies showed
signifcant potential in decentralised PV.
PV activities have been fairly limited, to small applica-
tions in remote areas that are not connected to the grid.
As nearly 99% of Egypt’s population is connected, there
does not seem much potential expansion possible in
terms of residential demand, unless different patterns
of demand and supply are developed for PV technolo-
gies. However, demand for stand-alone PV power supply
systems is high within the communication sector (e.g.
for mobile phone networks), and for military, aviation
and navigation aids, and for signs on highways. The total
installed capacity of PV applications reached about 6
megawatts by mid-2008.
Solar water heaters can be used in both residential and
commercial contexts, and are placed on rooftops in order
to capture solar radiation to produce hot water, which is
then held in storage tanks. This is a relatively low-tech
option, and could be highly cost-effective, signifcantly
reducing energy bills. However, investment costs for
solar water heaters are relatively high compared to
prices of conventional heating equipment (electric or gas
heaters), and the subsidisation of fossil fuel energy reduc-
es incentives for its adoption, and as a result the local
market remains limited and undeveloped.
There is more local manufacturing of components for
solar water heaters than other renewable technologies.
According to the Egyptian Competitiveness Report 2010,
there are around 4 local companies manufacturing and
installing water heaters, and another 5 which install
imported systems. Although most components and raw
materials are available in the Egyptian market, around
90% are still imported. If ways can be found to increase
and enhance the quality of locally produced components
and raw materials this could be another potentially sig-
nifcant source of job creation.
It has been estimated that 250,000 solar water heaters
were installed by 2007, resulting in greenhouse gas emis-
sions savings of about 0.25 million tons CO2 equivalent
annually. Another study estimates that this represents
only around 5% of the national potential market. This
implies that 100% coverage would save in the order of 5
million tons CO2 equivalent annually.
There is great potential for increased demand if the
framework conditions were improved, and already
signifcant demand from the commercial sector, (though
this is largely being met through imports currently,
because of the poor quality of locally manufactured solar
water heaters). This sector thus represents a potential low
hanging fruit.
15 2 RENEWABLE ENERGY GENERATION AND RENEWABLE ENERGY APPLIANCES
Concentrated Solar Power (CSP) systems produce
steam that can be used for industrial purposes, or in a
turbine to produce electricity, or for water desalination.
Although technical potential for CSP is signifcant within
Egypt, integration of CSP in industrial processes remains
very limited, although there are some CSP projects scat-
tered across Egypt. Thus demand is still very limited and
stimulated by NREA. There are currently no clear plans
for expanding CSP.
However, a recent World Bank (2011) study assessing
the local manufacturing potential for CSP projects in
the MENA region found that in the Kuraymat project
establishing a CSP plant in Egypt (involving Orascom
industries), around 60% of the value was generated
locally rather than from international players (though
some of the key components had to be sourced from
international suppliers), which compared favourably to
other projects implemented in the MENA region. They
noted that this enabled those frms to gain knowledge
which they should be able to use for future CSP projects,
and concluded that local industry is already capable of
developing and building CSP projects in Egypt, and that
this experience should become a reference point for CSP
projects in the region. So once again the potential for
local industrial development and job creation is clear.
They also noted that Egypt had for a long time been a
regional leader in the glass industry which is valuable for
the renewables sector, but that the industry now faces a
challenge in adapting its capacity to higher technology
content, noting that MENA countries now need to be-
come ‘centres of excellence’ rather than relying on their
traditional position as low cost, low skilled manufactur-
ing centres.
2.2 Framework conditions
The potential for development of the renewable energy
sector in Egypt is highly dependent on framework con-
ditions governing the energy sector as a whole. Egypt
has oil and natural gas reserves, but these are being
depleted quickly, and it will be diffcult to maintain this
high rate of production going forward, as the cost of
extracting remaining resources is expected to increase
signifcantly, and likely to become prohibitively expen-
sive. Egypt has in recent years become a net oil importer,
and with demand for energy in Egypt growing fast, and
a constrained supply, Egypt could potentially face a
serious energy shortage in the near future, and require
increasing imports, which would reduce energy security
and make Egypt more vulnerable to international oil
price shocks.
Despite these serious impending problems, both oil and
gas are subject to heavy subsidies, which clearly incen-
tivise higher fossil fuel use and more energy intensive
forms of production and behaviour by frms and house-
holds alike. These subsidies also seriously undermine the
incentives to invest in renewable energy technologies,
as it means they are much more expensive than the
subsidised fossil fuels. Price distortions favour energy
intensive industries at the expense of labour intensive
industries. This is undoubtedly retarding Egypt’s partic-
ipation in new, high growth industries and technologies
and threatens the long-term energy competitiveness of
the Egyptian economy.
The subsidies also cost an enormous amount of public
money, which is crowding out expenditure on pub-
lic services, and looking increasingly untenable at the
current juncture, with the public fnances facing growing
diffculties. There has been pressure to reduce ener-
gy subsidies for many years, but there are signifcant
political economy barriers to their removal which have
signifcantly hampered progress.
Nonetheless it is inevitable that over time the price of
renewable energy will fall and the price of conventional
fuel will rise. This by itself should generate an incentive
to invest for the long term. Indeed, previous to the revo-
lution there was quite a lot of investment into both con-
ventional and wind energy projects, though the political
uncertainty is now hampering further investment.
16
The 3 independent power providers made good profts
over the last 10 – 15 years, and private energy generation
is seen as a potentially lucrative opportunity, with Egypt
often also acting as a gateway to the rest of region.
The Government has now said that it will remove sub-
sidies from energy-intensive industries such as cement,
steel and fertiliser and has set out a schedule for achiev-
ing this. This has resulted in some investment in alterna-
tive forms of energy by those companies.
Although Egypt is now a net oil importer, it continues to
export oil and gas under long term contracts. But since
the world oil price has increased considerably in recent
years this has meant that export prices were lower than
spot world market prices. This represents an enormous
opportunity cost, and has led to the renegotiation of a
number of contracts.
More generally, all aspects of the energy sector are dom-
inated by the state, which is responsible for more than
99% of all generation. The transmission utility is a state
owned monopoly, the distribution utilities are also state
owned, and bulk sale prices are regulated by the state. All
of this prevents or strongly discourages private involve-
ment.
A new Electricity Law was endorsed by the Cabinet in 2008,
though it has yet to go to Parliament, which will now take
place at the end of 2012 at the earliest. The law will gradually
permit more private involvement in the energy market, by
allowing third party access to the infrastructure owned by
the Ministry of Electricity, and unbundling ownership of the
distribution system. This will facilitate private sector invest-
ment in energy generation and distribution. Competition
will be encouraged by allowing a limited number of quali-
fed consumers to contract directly with generators. This will
be phased in gradually, with some fexibility to avoid market
shocks, but a timetable will be set and announced in order to
provide the clarity needed by private investors. Privatisation
could potentially transform the market for independent
service providers.
The same approach will be taken to the market for re-
newable energy generation. The Electricity Transmission
Company and distributors will be mandated to connect
renewable energy power plants to their networks. The
NREA will call for competitive bids to construct renew-
able power plants, and the transmission company will
also call for competitive bids to construct connection
infrastructure. In due course, a feed-in tariff will be
introduced for the purchase of renewable energy. To
help cover the grid’s costs to support renewable elec-
tricity, a Renewable Energy Fund will be established. Its
main source of fnance will be the subsidies saved from
fossil fuels, which otherwise would have been used for
electricity generation. These reforms will undoubtedly
move things in the right direction, if and when they are
implemented.
Thus there is a plan to involve private companies in wind
generation in future through a competitive bidding pro-
cess, initially with associated guaranteed long-term pow-
er purchase agreements to reduce risks for investors. The
plan is to target highly qualifed international developers
with strong fnances and offering signifcant technology
transfer. Preference will be given to those committing to
use a higher share of locally manufactured components.
In due course a feed-in tariff will be introduced, taking
into consideration the prices achieved in stage one.
There is currently very limited scope for trade in energy
as physical interconnection between Egypt and neigh-
bouring countries is weak. This limits the potential for
domestically generated renewable energy to be exported
to Europe or other countries where demand for renew-
ables is likely to grow. Strengthening the intercon-
nection is likely to be very costly and does not seem
imminent.
Beyond the large scale wind generation industry, the
local market for renewable energy applications (e.g. solar
water heaters, and photovoltaic technologies) is unde-
veloped. Overall awareness of the availability of these
products – and of their potential fnancial viability – is
17
very low amongst potential consumers, and the local
companies supplying these products are not well known
either. There are some SMEs operating in the market,
but they tend to lack technical and fnancial capacity to
expand.
In addition, SMEs involved in the renewable energy
sector are poorly supported and weakly networked, and
have no association to represent them and interact on
their behalf with other stakeholders such as policymak-
ers, regulators, and donors and consumer organisations.
As a result the market for local renewable energy appli-
cations does not seem to be working well. Despite what
seems to have been a reasonable level of existing demand
for some potentially locally-produced appliances, such
as solar water heaters e.g. by hotels and restaurants,
these do not seem to have been available from the local
market, and have instead had to be imported, or dropped
from plans. This may be partly because of the poor qual-
ity of locally produced solar water heaters in the past.
Grant funded NGO programmes to install solar water
heaters have sometimes undermined market develop-
ment by paying insuffcient regard to the quality and
ongoing maintenance of units supplied, giving the whole
sector a bad reputation.
There seem to be many skills gaps that need flling. For
example, there is a severe shortage of skills to maintain
wind farms. The system for vocational education in
Egypt is highly fragmented and there are no common
standards for qualifcations. The Ministry of Environ-
ment does not have a mandate to identify skills gaps and
develop qualifcations to address them.
The culture of entrepreneurship is relatively limited
within Egypt, as most well qualifed individuals have tra-
ditionally seen formal employment as the optimal form
of livelihood – indeed almost as an entitlement – and
thus do not see entrepreneurship as a desirable alterna-
tive. This weak entrepreneurial culture is also refected
in the banking sector, which tends not to serve the SME
Private owner of a photovoltaic system
2 RENEWABLE ENERGY GENERATION AND RENEWABLE ENERGY APPLIANCES
18
sector well, or to be good at evaluating new small busi-
ness prospects. However, arguably the binding constraint
is know-how rather than access to fnance for the SME
sector. While for investments with a long payback, access
to fnance may present more of a binding constraint.
A shortage of patient capital for long term projects is a
problem in many countries globally.
2.3 Policy recommendations and
economic considerations
Policies have clearly been starting to move in the right
direction, although it remains to be seen whether the
policy direction will remain the same under the new
government, and whether the planned policies are
actually implemented. The current political uncertainty
is an enormous disincentive to private investment, so the
sooner greater clarity is achieved on the future Govern-
ment’s economic stance and policy direction, the better.
The removal or reduction of fossil fuel subsidies is clearly
a key element of the framework conditions that would
be conducive to development of the renewables sector.
Reducing fossil fuel subsidies represents a signifcant
win-win, as it would save a lot of public money. But it
would also, of course, push up prices to users. This gener-
ates three main areas of concern:
1. Whether the removal of subsidies will hurt poor
people. But energy subsidies do not target the poor
well. A high proportion of the subsidies go to large
consumers of electricity, which tend to be people
in high income brackets e.g. owners of high energy
consumption cars, and energy intensive industries
who can then make excess profts. Sustaining energy
subsidies limits the Government’s ability to invest
in health, education and infrastructure, which are
important for the country generally, and particularly
for the poor. Replacing energy subsidies with mone-
tary payments to poor households is one option that
may be politically expedient, and would also be a
more effcient way to target the poor with assistance.
2. Whether the removal of subsidies will damage the
private sector, by driving up costs and reducing their
competitiveness on world markets. The counter
argument is that artifcially low energy prices are
signifcantly distorting the market, making Egypt’s
production methods and general way of life highly
energy intensive, which will reduce the competi-
tiveness of Egypt in the long term. Price distortions
favour energy intensive industries at the expense of
labour intensive industries, so maintaining energy
subsidies may be retarding Egypt’s participation in
new, high growth industries and technologies.
In fact the removal of fossil fuel subsidies could help
Egypt to beneft from frst mover advantages. There
will be winners and losers in the global transition
to cleaner energy, and pioneering countries will
develop industries and technologies which will open
avenues for indigenous development and export,
alongside opportunities for outward FDI generating
new markets and proftable investment opportuni-
ties for the Egyptian private sector. The growth of
energy intensive industries while energy is artifcial-
ly cheap is likely to become a liability in the medium
term.
3. Whether the removal of energy subsidies will dam-
age traditional fossil fuel producers within Egypt.
Even this is unlikely to be a signifcant problem, as
demand is growing faster than supply, and Egypt’s
reserves are projected to run out in the not too dis-
tant future, so the exploitation of fossil fuels is likely
to continue to the extent possible in any case, even
as alternative energy sources are developed.
Thus there is little economic downside from the removal
of fossil fuel subsidies. However, some of the neces-
sary changes will be politically challenging, and have
been stymied in the past by vested interests opposed to
reform. Removal of fossil fuels subsidies has been a chal-
lenge in many other countries, as they are both unpop-
ular with big business, which claims their removal will
undermine its competitiveness, as well with the public,
19
who fear it will push up household energy prices – par-
ticularly affecting the poor. In practice fossil fuel sub-
sidies tend to disproportionately beneft richer people,
who have higher energy consumption, so are not a good
way of targeting assistance to the poor. Yet this is a strong
coalition for government to fght, and many countries
maintain fossil fuel subsidies for this reason.
The considerations above suggest that subsidies should
be phased out over time, to give people time to adjust,
and should be undertaken in a politically sensitive way,
that neutralises vested interests opposed to reform, and
focuses on how money that is saved will be spent in
future.
This may involve compensating those groups who are
losing out from the reform, and it could also involve the
establishment of a new, better targeted welfare system
to support the poor. In addition, some of the subsidies
should be redirected to supporting renewable energy, as
is currently planned, notwithstanding the need to use
some of the savings to pay down debt and improve the
public fnances.
In addition, ways can be found to reduce subsidies that
will stimulate other green improvements. For example,
the Energy Effciency Unit of the Supreme Energy Coun-
cil has proposed a new concept for a scheme whereby
the price charged to a business for electricity depends on
how energy intensive it is compared with the average for
the sector. If is higher than the average level of energy
intensity, the business must pay a higher price.
Thus the process of reducing energy subsidies clear-
ly needs to be implemented carefully, but given the
strength of the case, and the fact that action will be
urgently needed in order to sort out the public fnances
in the short term and avert energy crises in the medi-
um term, and given there will be a new Government in
place, potentially with a much stronger mandate to make
transformational changes, the potential to make progress
on this under the new Government looks perhaps stron-
ger than it has been before.
However, even in the absence or slow implementation of
subsidy reduction, it should be possible to make progress
in developing the renewables sector, through improve-
ments in the enabling environment and other frame-
work conditions governing the sector. In any case, given
that growth in demand is outpacing growth in the supply
of fossil fuels, and prices of conventional fuels will inevi-
tably rise going forward, while the cost of renewables will
fall, the longer term direction of travel seems inevitable,
and this in itself should strengthen investment incen-
tives.
What is ideally needed is a planned and determined shift
to renewable energy: a clear, long term, holistic imple-
mentation plan for the development of the sector, which
gives consideration to private sector incentives, likely de-
velopments in both domestic and international demand
for renewables, and technological innovation, and which
considers how the whole supply chain can be developed
to generate a competitive industry along with broad
based growth and job generation. The policy should set
out targets, timeframes, resources, responsibilities (incl.
public sector vs. private sector), and indicators and needs
some fexibility to respond to changing conditions, as
well as more detailed plans for the short term.
It should be developed in conjunction with the various
relevant Government Ministries, the private sector,
and civil society, (including universities and research-
ers developing new technologies), while attempting to
predict and address political economy barriers to action.
An appropriate institutional set up is needed to achieve
this. The existing Supreme Energy Council may have
adequate authority to do this successfully, but will have
to overcome challenges associated with inter-Ministerial
policies and inconsistencies within current mandates.
Such a holistic framework or Action Plan – if credible
– would provide the increased clarity needed to create
the right incentives for the private sector to invest and
innovate in renewables. The positive market reaction to
the announcement of plans to increase the contribution
2 RENEWABLE ENERGY GENERATION AND RENEWABLE ENERGY APPLIANCES
20
The Tunisian Solar Programme (PROSOL) – a joint
initiative of the Tunisian National Agency for Energy
Conservation (ANME), the state utility Société
Tunisienne de l'Electricité et de Gaz (STEG), and the
United Nations Environment Programme – pro-
vides an example of successful solar thermal market
development. It took a holistic approach, actively
involving all the sector stakeholders, including the
banks. The project incorporates: (i) A loan mech-
anism for domestic customers to purchase SWHs,
paid back through the electricity bill; (ii) a capital
cost subsidy provided by the Tunisian government;
(iii) discounted interest rates on the loans which
were progressively phased out; (iv) supply side
promotion; (v) establishment of a quality control
system; (vi) an awareness raising campaign; (vii) a
capacity building program; and (viii) carbon finance
through the CDM.
Box 1: Case study on PROSOL
Over 50,000 Tunisian families now get their hot
water from the sun, and as of 2008, PROSOL helped
avoid 214,000 tonnes of cumulative CO2 emissions.
Jobs have been created as 42 technology suppliers
were officially registered and at least 1000 com-
panies installed the systems. The annual avoided
subsidies of displaced LPG for the Government were
estimated at around $3 million in 2008.
Source: “Solar Thermal Application in Egypt, Jordan, Lebanon, Palestinian Territories, Syria and Tunisia:
Technical Aspects, Framework Conditions and Private Sector Needs” Workshop Report, March 2009, GTZ
21
of wind energy to the electricity grid is a clear indication
that the Egyptian private sector is willing and able to
react to clear signals. The already planned liberalisation
under the Unifed Electricity Law and the removal of
fossil fuel subsidies may be expected to have signifcant
impacts on private investment, if progress towards them
is credible. However, much more could be done.
Specifc policies that could be adopted within the context
of an Action Plan as set out above, potentially with the
support of international donors, could include:
1. Public education of benefts (e.g. in terms of energy
savings and future risk mitigation) and public-private
dialogue in order to mobilise support for the required
transformation. This should be based on an informed as-
sessment of the costs and benefts of different approaches,
and also the costs of inaction, to make a strong case.
National, informed dialogue is the frst step needed to get
this transformation underway. The Egyptian public cur-
rently has a fairly limited awareness of either the looming
threats or the potential opportunities Egypt faces.
2. Political economy considerations / analysis designed
to understand poverty impacts and to identify and
address the vested interests who are likely to be
opposed to the reform. The development of political
tools will be needed to neutralise the potential mo-
bilisation of these vested interests.
3. Use of economic incentives to stimulate private
investment e.g. procurement policies, differential
pricing and taxation to promote renewable tech-
nologies, fnancing mechanisms etc. Other than the
expected Unifed Electricity Law, the main policy pro-
moting renewable energy technologies is the reduced
customs tariff for equipment and components.
4. Effort should be made to attract foreign investment in
renewables. There is also a need to speed up the pro-
cess for investment in the renewable sector (i.e. tenders
should be handled more effciently). A one stop shop
could be set up for all potential investors, including
small wind farms. At the same time, service providers
from abroad could be required to train local counter-
parts within Egypt to facilitate skills transfer.
5. Use of licensing requirements for industrial energy
users to incentivise use of renewable energy. For
example, new cement plants are already required to
provide their own energy sources, and this has stim-
ulated their interest and investment in stand-alone
renewable energy generation projects. Similarly, the
Government could introduce a requirement that
some proportion (e.g. 25%) of energy in hotels should
come from solar energy sources over a certain time
period. Or if a property developer uses solar water
heaters they will be given a licence to build more
rooms or more apartments.
6. Use of downstream regulation e.g. new building
codes, to incentivise or require use of technologies
such as solar water heaters (as discussed further in
the next section).
7. Investment in connections of renewable energy gen-
eration installations to the grid. This can potentially be
at least partly privately fnanced, if there is suffcient
liberalisation (e.g. of transmission, distribution, pricing
etc.), to allow private involvement. The proposed new
Electricity Law states that it will be the state-owned
transmission and distribution utilities that will con-
struct and fnance new connections. International
experience has shown that relying on the establishment
of these connections through state owned utilities can
become a major bottleneck to development of the sec-
tor. This is particularly true when state owned utilities
are likely to suffer from a shortage of investment capital
at times when the country is in fnancial diffculties.
Thus some form of public private partnership frame-
work should be sought.
8. In the longer term, investment in infrastructure to
facilitate the export of solar power based electricity.
2 RENEWABLE ENERGY GENERATION AND RENEWABLE ENERGY APPLIANCES
22
This is likely to generate much stronger incentives
for renewable energy development, particular in light
of trends coming from Europe to purchase more
renewable energy, and the opportunities associated
with emissions trading schemes. In the meantime, it
could be possible to explore a virtual market whereby
natural gas is exported and is paid for by European
consumers under a carbon market mechanism, if it is
being replaced in the domestic national grid within
Egypt by solar energy.
9. Development of a clear regulatory framework for the
renewable energy industry, and the development,
testing, certifcation and enforcement of standards
e.g. quality standards for solar water heaters, under
the Egyptian Electric Utility and Consumer Protec-
tion Regulatory Agency.
10. Some reorganisation of the bodies governing the
sector may be required. The New and Renewable
Energy Authority (NREA), an organisation affliated
to the Ministry of Electricity and Energy, current-
ly has responsibility for developing the renewable
energy sector in Egypt. However, this means it has
responsibility both for policy on renewables, as well
as developing, operating and maintaining most wind
farm projects within Egypt, which could represent a
potentially signifcant confict of interest, particularly
following liberalisation and greater private sector
involvement in the sector.
11. A clear strategy for the development of the solar
energy sector would also make sense, building on the
strategy already articulated for the wind sector.
12. Policies to promote local production of inputs for
renewable energy technologies, both to generate
jobs and economic opportunities locally, and to
avoid negatively affecting the national trade balance
through increasing imports. Indeed, the current
import incentives for components of renewable
energy generation need to be revisited and tailored to
optimise the pace of transformation and the develop-
ment of the local supply chain. The creation of a local
industrial base to serve this growing industry could
also provide an important political asset to sustain
progress in the initial stages of the transformation.
This should be focused on the wind energy sector in
the frst instance, as that will have the most growth
potential initially.
13. However, policies to stimulate local production also
need to balance the short term costs of requiring
local input production, which will depend on existing
local production capacity, and its quality, cost and
reliability vis-a-vis imported components. For exam-
ple, it may be best to put in place incentives for 20%
of solar water heaters to be locally produced, with
a target to increase that proportion to 40% within a
specifed time frame. If too strict, local input require-
ments can jeopardise the success of the sector as a
whole. This will clearly vary product by product. Poli-
cies to promote localisation of supply should there-
fore be designed carefully to promote and incentivise
improved local production over time, with minimum
short run cost to downstream users, and also with the
aim of reducing investment costs in the long term,
thus improving the feasibility of the renewable sector
in Egypt.
14. Capacity building and development of the SME
sector is also required, including the development
of SME networks, and perhaps the creation of an
umbrella body that can undertake roles such as
establishing an up to date catalogue of suppliers,
providing a repository of market information to keep
involved SMEs up to date with new developments,
provide matchmaking services between suppliers and
consumers, undertaking value chain studies, devel-
oping marketing materials and training courses, and
providing representation within policy debates.
15. Increased funding and support for energy R&D, and
mechanisms to facilitate coordinated R&D, linking
23
Construction of a wind farm near Zafarana
2 RENEWABLE ENERGY GENERATION AND RENEWABLE ENERGY APPLIANCES
24
the various players involved to each other and to
market players. This could build on the approach
adopted for the GIZ-supported Innovation Networks
which already cover 9 different sectors including
solar water heaters and green construction. Feasibil-
ity studies, and the introduction and expansion of
demonstration projects in the different technologies
could also be valuable, alongside the strengthening of
intellectual property rights. Development of neces-
sary skills and accredited training courses. Specifc
training is needed to improve local capacity in design
and construction, operation and maintenance,
and engineering. Undergraduate and postgraduate
courses are required, with accredited qualifcations
established in cooperation with NREA. A process of
identifying key skills gaps should be undertaken.
MTI’s Productivity and Vocational Training De-
partment (PVTD) can address vocational training
for green sectors, but there is also a need for a more
coordinated approach to developing technical and
vocational education and training, with inter-Min-
isterial cooperation including with the Ministry of
the Environment. It is also important to discuss with
other market players how best to provide training e.g.
through public or private provision.
16. New fnancing mechanisms for SMEs. Most SMEs
seems to fnance start-up from their own funds.
There does not seem to be a strong culture of lend-
ing to SMEs within the banking sector. Policies to
encourage banks to develop new lending streams
for SMEs, and some form of subsidisation (e.g. in
the form of loan guarantees) could be considered in
light of the substantial externalities, and to facilitate
demonstration to banks of the potential commercial
value of this sector. In addition, fnancing mecha-
nisms to support the upfront investment in renew-
able energy by consumers may also be considered.
17. The Clean Development Mechanism has been used
for three wind projects to date in Egypt. Further con-
sideration should be given to the potential for both
public and private climate fnance to contribute to
investment in the renewable sector in Egypt. Stream-
lining procedures, particularly those related to the
Designated National Authority (DNA) may assist with
the aim of accessing private investment funds. The
development of a mechanism or umbrella organi-
sation (e.g. a sustainable energy users association) to
aggregate small projects together into larger projects
could also facilitate increased access to mechanisms
such as CDM.
A GTZ / MTI study on the prospects for the renewable
energy sector in Egypt produced in 2009 also sets out a
detailed proposal for a ‘roadmap’ to achieve the develop-
ment of the sector.
There are some risks associated with future oil and car-
bon prices, and technological developments which may
result in competitive dominance of one form of renew-
able energy over another. However, there will always be
some uncertainties, and there are substantial risks and
costs associated with inaction as well, thus calculated
risks will need to be taken going forward, and diversi-
fcation e.g. into different types of renewables may be
recommended to minimise those risks.
In sum, If the new energy law is implemented it should
generate more jobs, and as there is growing demand for
energy, these jobs are unlikely to be at the expense of
jobs in the fossil fuel energy generation sectors – they
are perhaps more likely to be at the expense of imported
fuel. While it is possible that in the short run at least, the
cost of domestically produced renewable energy will be
higher than fossil fuel imports, there are many signifcant
long run gains to set against this short term cost, such
as energy security (bearing in mind the substantial fscal
burden of higher net imports of oil if oil prices continue
to rise or spike in future), jobs, FDI bringing physical cap-
ital with associated technological spillovers and human
capital investment, development of local manufacturing,
and potential future comparative advantage generating
future outward investment opportunities.
25
Long term goals
• Push for: fossil fuel subsidy removal; implementa-
tion of the National Electricity Law; improved regu-
latory framework for renewables; and development
of a cross-Ministerial strategy to develop the sector.
• Explore public/private partnership framework to
invest in connections of renewable energy genera-
tion installations to the grid.
Box 2: Top priorities for MTI to promote
the renewable sector
Potential quick wins
• Take steps to reduce disincentives for foreign
investment in renewables incl. speeding up the
investment process, creating a one stop shop for
potential investors, and signalling welcome to
foreign investors.
• Introduce licensing requirements or ‘carrots’ for
industrial energy users to incentivise use of renew-
able energy.
• Undertake awareness raising activities, develop
quality standards, and support the provision of
accompanying training for local SMEs so they can
better serve domestic renewables industry.
2 RENEWABLE ENERGY GENERATION AND RENEWABLE ENERGY APPLIANCES
26
3.1 The opportunity
The construction sector contributes around 4-6% of GDP
in Egypt and around 7-8% of total employment, includ-
ing many jobs for low skilled or unskilled workers. In
addition, the employment elasticity of the construction
sector is high, implying that a relatively small increase
in economic activity in the sector will have a signifcant
impact on employment.
At the same time, the construction sector offers signif-
icant potential for improvements in energy effciency.
The building sector is the biggest single consumer of
fnal energy worldwide, using 35-40% of energy resources
and contributing about a third of all energy-related CO2
emissions. The sector also offers the highest potential
for energy savings and the use of renewable energies.
By improving building design, and using well-known
technologies such as insulation, solar water heaters, and
effcient lighting etc., substantial energy savings can be
made – enough to make the initial investment required
in energy effciency improvements pay for itself within a
short time period.
Thus at no additional cost to the overall economy,
strengthening incentives for energy effciency in both
existing and new building stock in Egypt could stimulate
signifcant numbers of new job opportunities in the con-
struction sector – particularly through the retroftting of
existing buildings with insulation and solar water heaters
etc. It would also facilitate the development of – and job
creation in – local manufacturing industries involved in
supplying the necessary products and materials. As dis-
cussed above, the potential for Egyptian produced solar
water heaters is particularly clear.
Green construction more generally involves planning,
design, construction and maintenance of buildings
in a way that achieves resource effciency and energy
effciency, including greenhouse gas emissions reduc-
tion, pollution prevention, noise abatement and waste
removal. International best practices have shown that
green construction can yield a 40%+ saving on construc-
tion costs and improved lifetime performance. The trend
towards green construction is becoming increasingly
apparent across the whole MENA region, thus mastering
it could also increase competitiveness of the Egyptian
construction industry, enabling it to become a regional
pioneer in this feld.
3.2 Framework conditions
Once again, energy subsidies are undermining incentives
to adopt energy effciency measures in buildings. The
MED-ENEC project which supported energy effciency
in the construction sector of 10 southern and eastern
Mediterranean countries including Egypt, showed in its
pilot projects an average saving of 57% of primary energy
for heating and cooling, compared to a conventional
building in the same country. Such savings should in
principle generate strong demand for energy effciency
measures in both new and existing buildings. However,
energy subsidies signifcantly undermined those incen-
tives within Egypt, and meant that the payback period
before the cost of any initial investment was recouped (in
terms of savings on energy bills), was much longer than it
would otherwise have been, estimated at 30 years in the
case of Egypt.
Of course, the incentives depend very much on who is
paying for the electricity, and who is paying to invest in
energy effciency. As it would likely be homeowners who
are investing in energy effciency measures, but who do
not pay the full cost of energy due to the subsidies, their
incentives are low. However, by reducing demand for
electricity in buildings, energy effciency measures would
also substantially reduce the cost of subsidies paid by the
government, thus the government itself will potentially
gain fnancially from the energy effciency measures over
a certain time period, and this may provide a case for
government to pay for, or subsidise, the energy effciency
measures itself. However, given short run current fnan-
cial constraints this may not be feasible, and removal of
the subsidies would be the better solution for the econo-
my as a whole.
3 Construction Sector:
Green Buildings
Construction worker at the building site of the Alexandrian Library ?
27
28
Green building standards are another important way to
incentivise investment in green construction, and could
work even in the absence of subsidy removal if enforced
properly. The Ministry of Housing, Utilities, and Urban
Development is responsible for developing and updating
the national Building Energy Effciency Codes (BEECs).
The residential BEEC was introduced by a ministerial
decree in 2005 and a commercial BEEC was established
in 2009. Both codes were developed with international
assistance provided through the United Nations Devel-
opment Program and the Global Environment Facility.
The residential BEEC is expected to reduce electricity
for cooling in air conditioned new homes by 20 percent
while improving comfort in non–air conditioned new
homes. Both codes and a third BEEC for public buildings
are mandatory. But the process of BEEC enforcement is
still in a very early stage, and compliance is negligible. A
comprehensive implementation program was designed
but has not been implemented. Thus, basic compliance tools
are still lacking and capacity building has not taken place.
The Egyptian Green Building Council, (EGBC) was
established in 2009 with an objective to promote green
construction, and comprised Government offcials from
many departments (including MTI), business leaders,
NGOs and labour leaders. One of the aims was to encour-
age building investors to adopt BEECs as well as other
sections of existing codes targeted at energy effciency
and environmental conservation.
The EGBC also developed the Green Pyramid Rating
System (GPRS), upon which a consultation document was
published in April 2011. The GPRS provides three levels of
voluntary certifcation for green buildings based on defned
requirements. This mirrors similar schemes that have been
developed in other countries, and which provide evidence
that owners, investors and the public are starting to place a
premium on certifed green buildings. Whether this is also
likely to be the case within Egypt remains to be seen, and
probably depends in large part on the success of associated
awareness raising activities and culture change required
in order to achieve real improvements in environmental
awareness and decision making. Currently there seems to
be little awareness and information about the building code
among the stakeholders involved.
Another relevant scheme is the Green Star Hotel Initia-
tive, which is a public / private partnership that has been
developed by Orascom Hotels, AGEG Consultants and
GIZ. It is a voluntary eco-label initiative, by which hotels
are awarded a certain number of green stars depending
on their adoption of various sustainability and energy
effciency related measures, and thus could potentially
increase demand for green construction in the hotel
sector. This is a voluntary scheme, designed to respond to
the growing environmental awareness of international
consumers, who are increasingly questioning the envi-
ronmental credentials of the various tourism services
they consume when travelling abroad. However, this
kind of environmental awareness is currently seen much
less amongst Egyptian consumers.
Other market failures that are undermining the adoption
of energy effciency measures in buildings include the
following:
• Developers and potential clients are not aware of
the technical and fnancial potential of the energy
effciency measures.
• Suppliers and developers (noting that the sector
is dominated by SMEs and exhibits a high level of
informality) lack know-how for the identifcation,
procurement and implementation of appropriate
energy effciency measures. The informal nature of
the sector also discourages investment in skills and
training of the workforce. The construction sector
supply chain is fragmented, and different players
within it have different interests and risk perceptions.
There is a lack of skilled engineering, architecture,
installation and maintenance capacities.
• There is a lack of fnancing to pay for the higher
upfront costs of green construction. Potential clients
29
Source: “Green Jobs: Towards decent work in a sustainable, low-carbon world.” UNEP & ILO 2008.
The German Alliance for Work and the Environment
introduced a major initiative to retrofit German
homes. The Alliance is a collaborative effort between
the German government, unions, NGOs, and em-
ployers’ federations. From 2001–2006, an estimated
$5.2 billion of public subsidies stimulated close to
$20.9 billion in investment and resulted in 342,000
Box 3: Case Study on Green Buildings
apartment retrofits by March 2006. Energy efficient
measures included improving heat insulation of
roofs, windows, and walls; introducing advanced
heating technologies and controlled air ventilation
systems; and using renewable energy such as PV or
solar thermal systems.
An estimated $4 billion was saved through addition-
al tax revenues and reductions in unemployment
benefits, along with 2 percent of annual emissions
attributed to buildings in Germany. In 2005, the
funding was increased to almost $2 billion per
year. For every $1.4 billion invested in the program,
25,000 additional jobs were expected.
3 CONSTRUCTION SECTOR: GREEN BUILDINGS
30
often do not have the fnancial capacity and liquid-
ity to bear the upfront cost of energy effciency
investments, even if they are aware of their likely
proftability. Egyptian banks have little experience
and expertise in evaluating energy effciency projects,
they are usually not interested in the relatively small
credit amounts, and do not take into account the
higher available income of the borrowers through
energy cost savings in future.
• The economic benefts of the energy effciency im-
provements often do not accrue to those bearing the
costs, particularly when a property is rented out by
the landlord to a tenant.
3.3 Policy recommendations and
economic considerations
The Egyptian Competitiveness Report recommends
that the Egypt adopts a green construction strategy, by
convening public and private sector representatives from
the construction industry, to develop a plan and estab-
lish the standards and incentives for green construction.
This strategy development could build on the work and
multi-stakeholder approach adopted by the EGBC. Mea-
sures could include:
1. The continuation / strengthening of the system
of progressive electricity tariffs, a sliding scale for
electricity prices, which starts low, but escalates as
energy use per unit increases. This would strengthen
incentives for energy effciency measures by proper-
ty owners. A progressive tariff could also be intro-
duced for gas pricing.
2. Enhancing enforcement of building codes. Investing
in more inspectors to strengthen enforcement would
create jobs directly, would raise awareness and com-
pliance, and could even be self-fnancing through
the imposition of fnes for non-compliance. Alter-
natively this task could be outsourced to a private
company.
Engineers repairing an electric generator at the Aswan Dam
31
3. This should however, be accompanied by a review
of regulations and standards to promote energy
effciency. Current regulations may not be effective
because they are too ambitious, and thus unrealis-
tic and unachievable for many contractors. Thus it
may be necessary to review existing regulations in
dialogue with those in the industry, and adapt them
as necessary, to make them more achievable, with
a view to gradually strengthening them over time.
Thus a phased approach could be applied.
4. Performance ratings could be introduced for specifc
features such as air conditioning and ventilation. De-
velopment and marketing of labelling schemes could
be undertaken. A major marketing drive and media
campaign could be launched in conjunction with
the EGBC to raise awareness about its new Green
Pyramid Scheme. International quality and energy
effciency management norms (e.g. the ISO standards)
could be adopted and adapted for Egypt and promot-
ed in the industry.
5. The introduction of fscal or other fnancial incen-
tives e.g. green taxes, eco-taxes, or landfll taxes could
be introduced to generate revenue that can be used
to subsidise the initially higher costs of green con-
struction, and that can also potentially increase the
attractiveness of green buildings. Property developers
using energy effcient technologies e.g. solar water
heaters, could be given additional rights e.g. extra
land, or rights to build more apartments etc.
6. Government procurement requirements could be
introduced e.g. requiring that developers abide by
minimum energy effciency standards for Govern-
ment-fnanced low income housing projects for
example. Energy effciency requirements for public
buildings could be adopted.
7. Working with fnancial institutions to improve access
to credit for the upfront costs of energy effciency
measures, (detailed recommendations for this were
provided in the KfW report “Promotion of Energy
Effciency in Egypt through Financial Institutions”)
or to provide subsidised credit programmes or credit
guarantee schemes. This could include the creation
of an Energy Effciency Fund to fnance investment
in energy effciency measures, which should pay for
itself in terms of reduced future energy subsidies, and
could be implemented through the domestic banking
system to build its experience of investing in energy
effciency thus demonstrating the fnancial viability
of such investment.
8. Studies, demonstration projects and awareness
raising campaigns for both the industry and consum-
ers, to illustrate the costs and benefts of improved
energy effciency measures. This will work most
effectively where there are expectations of increased
energy prices going forward.
9. Incorporation of energy effciency into higher edu-
cation programmes and increased R&D expenditure
and network building between existing R&D players.
10. Working with the private sector to identify where
there are gaps in the availability of suitable materials
and technologies within Egypt, and explore the possi-
bility to support the development of these industries
locally.
11. Working through schemes designed to support SMEs
and professionals involved in the sector, to raise
awareness and build relevant skills and capacity,
including helping SMEs to comply with standards.
12. Investigating international sources of green climate
fnance that may help to underpin the necessary
investments. Sectoral projects could be developed
that could qualify for CDM e.g. for effcient lighting
or appliances.
3 CONSTRUCTION SECTOR: GREEN BUILDINGS
32
Manufacturing of a wind power station
33
Long term goals
• Push to build on current dialogue approaches
within EGBC, in order to develop a green construc-
tion strategy, review and adjust existing standards,
strengthen enforcement, and develop performance
rating / labelling schemes.
• Work with the private sector to identify where there
are gaps in the availability of suitable materials and
technologies within Egypt, and explore the possibil-
ity to promote the development of these industries
locally.
Box 4: Top priorities for MTI to promote the
green construction industry
Potential quick wins
• Work with fnancial institutions to improve access
to credit for the upfront costs of energy effciency
measures, or to provide subsidised credit pro-
grammes or credit guarantee schemes.
• Work through schemes designed to support SMEs
and professionals involved in the sector, to raise
awareness of market opportunities and build rele-
vant skills and capacity, including helping SMEs to
comply with standards.
3 CONSTRUCTION SECTOR: GREEN BUILDINGS
34
More than 50 percent of the Egyptian population depend
on agriculture as their main economic activity, and an
enormous amount of agricultural solid waste is gener-
ated every year. The sound disposal of agricultural solid
waste is thus one of the most pressing environmental
problems currently facing the country.
It is also one of the most visible, because the burning
of agricultural waste, and particularly rice straw, has in
large part been responsible for the creation of what has
become known as ‘the black cloud’ of pollutants which
affect Cairo and the Delta region during the months of
October and November each year.
Egypt is a major rice producer, generating around three
million tons of rice straw annually, most of which is
still being disposed of through burning in open felds
which is both wasteful, ineffcient, and highly polluting.
However, this continues largely because of the costs, time
pressures, and logistical diffculties associated with other
methods of removal of rice straw.
Available statistics indicate that only around 40 percent
of generated agricultural solid waste (about 6.9 million
tons/year) is currently utilized, while the remaining 60
percent is discarded as waste, either burnt, or illegally
dumped, both of which cause major environmental
problems. However, there are many potential uses of rice
straw (and other agricultural residues), which represent
signifcant market opportunities. Thus rather than being
viewed as a problem, agricultural waste should be rec-
ognized as a resource that might be utilized to generate
income and help conserve other, non-renewable resourc-
es. There are various potential uses for agricultural waste,
which are discussed in turn below.
4 Agricultural waste management
4.1 The opportunity
Production of biofuel which can be sold domesti-
cally, or exported
Residues from rice have been widely exploited for heat in
rice producing countries worldwide. For example, many
hundreds of thousands of people continue to cook on
specially designed rice husk stoves. Others use gasifca-
tion and biogas systems on a household scale and others
explore community-scale electricity generation from
locally produced biomass. However, there seems to be
very limited use of rice residues for energy in households
in Egypt, although R&D and pilot-scale ventures have
attracted attention and some agency-led investments
have been made. Small-scale use for home heating and/
or cooking was more common in the past, before rural
areas were electrifed and/or supplied with relatively
low-cost LPG gas in transportable bottles. So thus far,
energy from straw has remained small in scale in Egypt,
and is still being piloted, although a number of proposals
for larger-scale exploitation have been made.
Agricultural residues can be burned to generate electricity
to provide energy for farmers, or used as feedstock for
village-based centralized waste to energy (WTE) plants;
it can also be used to create biogas at the household level
through small units, or used to produce biogas on a more
industrial scale.
Generation of biogas from agricultural residues has been
promoted by the Government for many years, with a
number of small demonstration units established. Two
Government-funded plants have been constructed
with technical and fnancial assistance from China. Gas
produced is currently piped free of charge into houses in
local villages for cooking. This technology has consider-
able potential to be of value in other Egyptian villages.
However, with widespread access to modern power/fuels
in recent years, and subsidized prices, there has been
limited demand for alternative forms of energy. This may
change over time as discussed previously.
Woman during the harvest of cotton, Nile River Delta ?
35
36
But another market option to explore is the potential for
export. For example, rice straw pellets can be manufac-
tured and exported. A large-scale straw pelleting plant
was commissioned in 2008 for the sale of pellets into
export markets. One private factory has been established
so far producing biofuel from rice straw. This plant was
expected to create around 200 jobs, and there are plans to
build new plants elsewhere.
Straw briquetting is another option that has been
developed in recent years. During 2008, a joint Austri-
an-Egyptian initiative resulted in the establishment of a
straw briquetting plant which was expecting to sell most
product to the EU. A second plant is planned on the basis
of the success of the frst according to Hissewy (2008b). If
successful this may result in further investment.
Locally this could also be used for small-scale industries
such as crop drying and intensive poultry production.
However, the relatively high costs of harvesting and trans-
porting rice straw, and of manufacturing the pellets re-
quired for industrial feedstock, make it uncompetitive with
traditional fuels within Egypt, under current conditions.
Composting
Compost is the main traditional outlet for small-scale
rice producers with an estimated 20 percent of all home-
grown straw being made into compost for local use. With
the reduction of state subsidies for manufactured fertiliz-
ers, small-scale production is likely to increase. Rice straw
compost is also produced on a commercial scale, with a
few new large-scale factories having been constructed in
recent years, and methodologies for production adapt-
ed for local use. There is considerable scope to increase
commercial production, although market feasibility
will depend on location and other factors. Compost has
properties that will help with the reclamation of desert
lands, and extending agricultural areas, which are import-
ant Government objectives. Thus commercial compost
production could also potentially be stimulated by public
investment programmes for land reclamation.
There is a large demand for compost made from agricul-
tural solid waste and the demand is growing. It has been
estimated that the present demand for compost is around
53 million tons annually for the old Nile Valley land and
1.5 million tons a year for reclaimed land. The demand for
compost for reclaimed desert land is expected to reach at
least 30 million tons by 2017. With the present national
production capacity of compost being only about 20.7
million tons per year, there is clearly plenty of scope for
expansion in production for the national market alone.
These statistics suggest there is considerable economic
potential for compost production in Egypt.
Livestock feed
Rice straw is a crucial ingredient of livestock feed during
certain times of the year. Yet less than 25 percent of the
rice straw available is used for livestock production and
that which is produced is at small-scale, on the farm itself,
rather than in bulk, on an industrialised basis. Industrial
processing of straw to manufacture livestock feed offers
clear commercial potential, but more detailed assessment
of costs, potential demand and product development
options would be required.
There has been a signifcant increase in the cost of ani-
mal fodder in Egypt in recent years, due to the growing
population and shortage in areas required for cultivation
of foodstuffs. Given increasing demand for meat and
dairy products nationally, investment in industrial-scale
production is under consideration, thus demand for live-
stock feed is likely to grow, so this potential opportunity
warrants further examination.
As a substrate for the production of food crops,
particularly mushrooms
Small quantities of mushrooms have been produced com-
mercially in Egypt for more than 20 years, but domestic
production has been outstripped by imports. In recent
years, commercial-scale production has begun to expand
in Egypt, with 3-4 large producers now in business and
several new investments planned or underway. Both
37
small-scale and commercial large-scale production is
possible. Reporting from an FAO project has highlighted
the value of small-scale mushroom production units for
farm households, rural communities and village enter-
prises. The MALR/CAER has been promoting small-scale
mushroom production to rural communities for more
than four years, providing the training courses required
and the materials required. Upfront investment costs are
low, and proft margins are clear.
A report by ILO (2010) states that the Egyptian Environmen-
tal Affairs Agency (EEAA) has a programme to promote the
recycling of rice straw as an alternative to open burning,
and that their goal is to generate around 100,000 new jobs,
including through the baling of rice straw and cultivation of
mushrooms in 600 different locations in the Delta region.
So in sum, this sector has the potential to generate
signifcant new market opportunities for large and small
scale enterprises, and many associated jobs, and at the
same time to signifcantly reduce pollution. However,
there has been limited development of the sector, and the
commercial viability of some of these options remains
unproven. This is in part because of limited incentives to
use alternative forms of energy, due to subsidized energy
as discussed above, partly because of the costs of doing
business, and lack of appropriate investment climate and
legal and regulatory framework, and partly because of
immature technologies which have not enabled prices to
fall suffciently to make these options viable. However,
in some technologies there has already been investment
by the private sector, with some apparent success, thus it
seems that with a few improvements to the enabling en-
vironment there may well be the potential for some quick
wins in terms of market growth and job creation in the
industry, along with visible environmental improvements.
4.2 Framework conditions
The waste management and recycling sector in Egypt
generally is not regulated and there is no overarching
solid waste management (SWM) law. Instead, the legal
Working at a Landfill
4 AGRICULTURAL WASTE MANAGEMENT
38
framework is established in many different pieces of leg-
islation. The Ministry of Agriculture and Land Reclama-
tion has the main responsibility for providing oversight
of the agricultural waste sector, in cooperation and
coordination with the Ministry of State for Environmen-
tal Affairs (MSEA) and the EEAA.
Of particular relevance in terms of agricultural waste man-
agement have been the steps taken to limit air pollution
resulting from the burning of agricultural waste. These in-
clude Environmental Law No. 4/1994, which was amended
in Law No. 9/2009, and which stipulates that farmers who
practice rice straw burning can be fned up to L.E. 20,000,
and prohibits dumping of waste in areas other than those
specifed in residential, industrial and agricultural areas
and waterways. The EEAA has established a hotline for the
public to report incidents of burning.
In principle, these changes in policy should strengthen
the potential for a market in agricultural waste products, as
farmers seek alternatives to burning their waste which
should increase the supply of these by-products. While this
may have happened to some extent, in practice these laws
do not appear to be enforced very effectively, which means
that incentives for farmers to collect and sell their waste
products remain weak, and so supply remains limited.
Source: UNEP website: http://www.unep.org/unite/30ways/story.aspx?storyID=44
UNEP’s International Environmental Technology
Centre (IETC) is working with local institutions,
government, business and communities in two pilot
areas in Nepal and Sri Lanka to promote the re-use
of agricultural waste. It has published guidelines
on how to assess waste agricultural biomass – in-
Box 5: Case study on converting
agricultural waste
cluding rice husks, grass, and fruit and vegetable
waste – and to identify appropriate technologies
and business models. Working with principal
partners the National Cleaner Production Centre
in Sri Lanka, and the Society for Environment and
Economic Development in Nepal, UNEP has trained
communities and helped local partners to procure
and install technologies to treat some 2000 tonnes
per annum of rotten vegetables in Nepal, and 1000
tonnes per annum of mixed dry agricultural waste
in Sri Lanka, across the two pilot areas. The projects
have generated compost as well as heat used to dry
limes and other fruit, enhancing livelihoods in one
of Sri Lanka’s poorest areas. This approach is now
being rolled out in other countries.
39
(The traditional practice adopted by farmers in the past
was to store agricultural waste on the roofs of their
houses for use as fuel for their home ovens. However, the
increasing dependence on butane gas stoves has resulted
in a decreased reliance on agricultural waste as a source
of fuel. In addition, current Ministry of Agriculture reg-
ulations ban the storage of agricultural solid waste, as a
measure for combating crop diseases and pests, as well as
preventing fre hazards.)
Thus farmers’ incentives are to dispose of the waste as
cheaply as possible. The ban on the burning of waste – if
properly enforced – would be expected to increase the
dumping of waste. However, transportation costs and fees
for dumping at offcial dumpsites create incentives for
dumping of waste in unauthorised locations. Dumping on
the banks of canals and drains appears to be a common
means of disposal. The often signifcant quantities dumped
at such sites represent a major problem and have to be re-
moved regularly through maintenance work performed by
crews from the Ministry of Water Resources and Irrigation
(MWRI), generating costs for the public budget.
These constraints on the supply side are matched by
constraints on the demand side also arising from the
framework conditions. As already discussed, subsidies
for energy and fuel drive down incentives for alternative
fuel sources, and subsidies of fertilizer have reduced
demand for compost made from agricultural waste. The
removal of these subsidies would be expected to have a
signifcant impact on demand for – and thus prices paid
for – agricultural waste that can be converted into ener-
gy, fuel or compost.
Even in the absence of subsidy reduction, export mar-
kets may provide some potentially proftable market
opportunities using agricultural waste inputs as outlined
above, and this suggests a potentially important role
for MTI in developing this sector. Some private players
are already beginning to capitalise on these opportuni-
ties and going forward it seems likely that there will be
increased demand for agricultural waste from a variety
of sources. Thus a more strategic approach to managing
this sector at the policy level may be benefcial, cutting
across government departments, in order to provide
the enabling conditions for market development, based
on discussions with the private sector about potentially
lucrative market opportunities and the main constraints
to their development, and thus to maximise the scope for
industrial development, market opportunities for SMEs,
and job creation.
4.3 Policy recommendations and
economic considerations
The most obvious way to create a more enabling envi-
ronment for the development of the agricultural waste
sector would be to reduce energy and fuel subsidies,
and to a lesser extent fertiliser subsidies, which would
generate increased demand for alternative sources of
fuel, energy and compost, and thus stimulate demand for
agricultural waste as an input.
Another way would be to enforce more strictly the ban on
the burning or unauthorised dumping of agricultural waste,
which would increase the supply. In combination with this,
the removal of fees on authorised dumping sites in agricul-
tural areas could be one way of increasing their use, and the
cost of provision by local government could potentially be
recouped by the sale of that accumulated waste for industri-
al purposes. While farmers would have to bear the increased
costs of collection and removal of waste products, they
would at least not have to bear the cost of dumping, and may
in fact be able to generate revenue, if the industrial users are
willing to pay for the waste. They may be willing to do this if
accumulating the waste all in one place suffciently reduces
the cost of sourcing this as an input to industrial processes,
such that it becomes economic to pay for those inputs. This
is likely to be dependent on economies of scale, transporta-
tion costs and the potential to build processing plants near
the authorised dumpsites. Thus the optimal location and
number of authorised dumpsites could also be investigated.
Different models of public and private provision of these
dumpsites could also be explored. Incentives could be cre-
4 AGRICULTURAL WASTE MANAGEMENT
40
Man eating sugar cane during harvest
41
ated e.g. in the form of free land to be given to developers to
encourage the establishment of waste management plants.
In addition there may be scope to scale-up or develop
further some of the pilot projects that have been initiated
to explore uses of agricultural waste (e.g. for briquetting,
gasifcation, etc.), and to expand them or undertake new
public/private partnerships in order to ameliorate some
of the risks private players would face in developing new
markets and technologies in light of considerable uncer-
tainty about future market demand.
There is also scope to continue to invest in R&D, and to
support the adaptation and pilot testing of new technol-
ogies, and to promote networks and linkages between
those already involved in R&D and market players, in
order to maximise effciency and progress in terms of
bringing new technologies to market. Feasibility studies
and market assessments could also assist in this regard.
The potential could also be explored as to whether these
industries could be eligible to receive different forms of
climate fnance e.g. carbon credits through the Clean De-
velopment Mechanism, or grants through mechanisms
such as the Global Environment Facility.
Currently there seems to be little coordination and
shared interest in the development of this market.
Separate parallel investments are underway, and there
appears to have been little analysis of the impact of
potentially competing demands for agricultural waste,
how that might evolve, what impact that will have on
prices, and what that means for the future viability of
the various different industries that could potentially be
developed now.
Indeed there seems to be generally limited information
available about the agricultural waste sector in Egypt, so
there is a case to undertake more research, data gathering,
and analysis, in order to inform the development of a
strategy. This would also help to overcome information
asymmetries which may prevent market development.
In addition, this information could provide the basis for
proactively seeking domestic or foreign investment in the
sector. The FAO recommends that a useful start could be
made by accurately confrming the quantities of agricul-
tural waste that are likely to be available on an annual
basis. Without reliable information of this kind, the
potential market size remains open to conjecture and esti-
mation, and this uncertainty may undermine investment.
While the Ministry of Agriculture and Land Reclamation
(MALR) leads on many aspects of this issue, it is clear that
cross-departmental collaboration is needed to support
the industrial development opportunities that agricul-
tural waste offers. While MALR’s main focus is inevitably
agricultural and rural development, the role of MTI
should be to consider industrial and trading opportu-
nities arising from agricultural waste, to liaise with the
private sector to understand the market opportunities
and constraints, and to work with other government
departments including MALR to tackle these constraints,
identify priority areas for reform and support, and
develop an institutional and regulatory framework that
effectively underpins market development.
The MTI provides national services that link investors
with manufacturers and traders, and has responsibility
for state policy that encourages the expansion of indus-
trial development and the sustainable exploitation of na-
tional resources. It can do this by promoting investment,
ensuring quality, providing incentives, information and
infrastructure, and channelling national effort. Thus it is
well positioned to play a role in promoting awareness of
the industrial opportunities associated with agricultural
waste, develop a market development strategy, and to
help establish a network of relevant stakeholders, in-
cluding the agribusiness industry, to discuss and develop
a strategy for the sector, and to make linkages between
different parts of the supply chain, in order to stimulate
market development. Establishing a communication
strategy and action plan to raise awareness and commu-
nity participation will also be an important part of the
overall strategy.
4 AGRICULTURAL WASTE MANAGEMENT
42
In addition, there is a need to develop the human capital
and skills needed to fulfl labour requirements for the
sector. The ILO points to a number of labour and training
needs in agriculture waste management:
1. Drivers of tractors and trailers used in the feld: train-
ing is required in maintenance of tractors and trailers,
driving skills, occupational safety, communication skills.
2. Technicians for the operation of compressors:
training is required in operation and maintenance of
compressors, occupational safety etc.
3. Loading workers: training is required in loading trail-
ers, communication skills, occupational safety.
4. Technicians working in rice straw recycling: training
is required in composting techniques and handling,
occupational health and safety.
Discussion with private players to identify any skills gaps
and consider the best way to build these skills is recom-
mended, for example to ascertain whether the private
players can build the skills through on-the-job training,
or whether publicly supported schemes are needed.
There are many different ways that government could
stimulate market development through artifcial incen-
tives e.g. tax breaks, land concessions, export subsidies
etc. However, the rationale for these kinds of incentives
needs to be considered carefully, and only once a clearer
analysis has been undertaken of the potential viability of
the different markets even in the absence of these incen-
tives. There is little point in stimulating the development
of a sector through artifcial incentives if it is unlikely
to be sustainable in the longer term in absence of such
support, as such incentives would need to be quite
large to incentivise private investment in an otherwise
unviable sector. These incentives are usually costly and /
or economically ineffcient and this implies that efforts
could be more effectively targeted at sectors where there
are real market opportunities.
Artifcial incentives such as these are best used to stim-
ulate initial market development and / or overcome
market failures relating to uncertainty, but should ideally
not be established with a view to maintaining them in
the long term – unless this is an explicit decision taken
to overcome other market failures that cannot be tackled
at source. However, a focus on improving the enabling
environment, understanding the market and providing
better information, and promoting coordination across
the different players – thus tackling market failures at
source – should be the frst priorities.
Small-scale livestock producers currently dominate
market demand for rice straw, so if and when industri-
al-scale straw processing industries begin to dominate
the market, driving up the price of rice straw, then this
will likely increase the costs of those farmers, and may
reduce their access to low-cost feed. This combined with
the possible increased use and production of compost,
which is likely to substitute for organic fertilisers based
on farm animal manure, may result in a double blow for
livestock farmers. Some form of protection or compensa-
tion for these farmers may thus be considered desirable
or politically expedient.
43
Long term strategies
• Through dialogue with the private sector, analyse
industrial and trading opportunities arising from ag-
ricultural waste, and undertake market assessment
/ feasibility studies to understand the opportunities
and constraints.
• Work with other government departments in-
cluding MALR to tackle these constraints, identify
priority areas for reform and support, and develop
an institutional and regulatory framework that
effectively underpins market development.
• Establish a network of relevant stakeholders,
including the agribusiness industry, to discuss and
develop a strategy for the sector, and to make link-
ages between different parts of the supply chain, in
order to stimulate market development.
Box 6: Top priorities for MTI to promote the
agricultural waste management industry
Potential quick wins
• Through public-private dialogue, explore the fea-
sibility of creating incentives for private developers
to establish private waste management plants.
• Establish a communication strategy and action
plan to raise awareness and community participa-
tion in existing market opportunities.
4 AGRICULTURAL WASTE MANAGEMENT
44
There is signifcant potential to achieve green growth
in a number of sectors within Egypt. This paper has dis-
cussed a number of specifc green growth opportunities,
all of which exhibit clear potential to generate economic,
social and environmental gains. The existing framework
conditions within Egypt – particularly fossil fuel subsi-
dies – are undermining the development of all three at
this stage, but with the right conditions in place, much
could be achieved by private players in the development
of these markets, without the need for substantial public
funding. In the absence of major or swift reforms to fossil
fuel subsidies, there are other steps that could be taken
to generate the incentives needed to underpin market
development.
Thus the frst priority is to create the incentives that will
motivate private investment, and make it fnancially
viable. This could be through the removal of disincen-
tives (e.g. fossil fuel subsidies), or through explicit public
funding, but often incentives can also be created in other
ways i.e. through innovative use of ‘carrots’ to reward
businesses demonstrating appropriate behaviours.
In parallel to this, it seems there is a strong need within
the Egyptian context to raise awareness amongst the
public and business sector, about both the environmen-
tal costs of ‘business as usual’, and the potential market
opportunities and fnancial, economic and social benefts
of new green solutions and technologies. Thus there is a
need for education and media campaigns, consultation
processes, public / private dialogue, and civil society
engagement strategies.
Once demand and awareness has been created, the
priority will switch to building local capacity and skills in
order to overcome any supply constraints and thus max-
imise the benefts to Egypt in terms of growth opportu-
nities and job creation. However, where market demand
is strong, private players may be expected to begin to
respond in a more concerted way, thus ameliorating
some of these supply side constraints themselves.
5 Conclusions
A coherent, joined up government strategy is ideally
needed to achieve these objectives most effectively, set-
ting out a clear vision for the future, and an action plan
specifying the targets, timeframes, resources, responsi-
bilities (incl. public sector vs. private sector), and success
indicators.
The current political uncertainty is an enormous dis-
incentive to private investment, so the sooner greater
clarity is achieved on the future Government’s economic
stance and policy direction, the better. However, it is
clear that environmental issues are not currently top
of the political agenda within Egypt. Nonetheless, once
Egypt has a new Government in place, perhaps with
a much stronger mandate to make transformational
changes, the potential to make progress on these issues
may be stronger than it has ever been before.
Woman washing wheat before grinding ?
46
References
Abaza, H, N. Saab and B. Zeitoon (2011), “Arab
Environment 4. Green Economy: Sustainable Trans -
ition in Changing Arab World”, Beirut: Arab Forum
for Environment and Development.
Bushra, M (2000), “Policy and Institutional Assessment
of Solid Waste Management in Five Countries”, UNEP.
Denker, A (2011), “Partnership Landscape Analysis
Egypt: Promoting Green Growth in Cooperation with
the Private Sector”, GIZ.
Egyptian National Competitiveness Council (2010),
“Green Growth: A Vision for Tomorrow”, Cairo: ENCC.
Elsobki, M; Wooders, P; Sherif, Y (2009), “Clean Energy
Investment in Developing Countries: Wind Power in
Egypt”, IISD.
EUTech (2009), “Promotion of Energy Effciency in
Egypt through Financial Institutions”, prepared for KfW.
GTZ & MTI (2009), “The Prospects for the Renewable
Energy Sector in Egypt”, undertaken on behalf of the
Private Sector Development Program.
GTZ (2009), “Solar Thermal Application in Egypt, Jordan,
Lebanon, Palestinian Territories, Syria and Tunisia:
Technical Aspects, Framework Conditions and Private
Sector Needs”, Workshop Report.
International Resources Group (2005), “Alternative
Methods for Solid Waste Management and Treatment
and Disposal of Wastewater”, Report No. 7, on behalf of
Ministry of Water Resources and Irrigation & USAID.
ILO (2010), “Skills for Green Jobs in Egypt”, EcoConServ
Environmental Solutions.
Liu, F; Meyer, A.S.; Hogan, J.F (2010), “Mainstreaming
Building Energy Effciency Codes in Developing
Countries”, World Bank Working Paper No. 204.
Selim, T (2009), “Egypt, Energy and the Environment”,
Adonis & Abbey Publishers, London.
Steele, P; El-Hissewy A; & Badawi A (2009), “Technical
Manual: ‘Agro-Industrial Use of Rice Straw’ Exploring
opportunities for making better use of rice residues in
Egypt”, FAO/MALR.
Suding, Dr. P (2009), “Energy Effciency Policy in
Egypt – Strategic Issues and Short Term Options”, Draft
Memorandum, JCEE / GTZ.
SWEEP-Net (2010), “Country Report on Solid Waste
Management Egypt”.
UNEP & ILO (2008), “Green Jobs: Towards decent work in
a sustainable, low-carbon world”.
UNEP (undated), “Waste Not, Want Not: Converting ag-
ricultural biomass waste into energy”, http://www.unep.
org/unite/30ways/story.aspx?storyID=44.
Wenzel, K (undated), “MED-ENEC: The Implementation
Gap for Energy Effciency in Buildings. Experiences from
the MENA-region”.
World Bank (2011), “Middle East and North Africa
(MENA) Region Assessment of the Local Manufacturing
Potential for Concentrated Solar Power (CSP) Projects”,
Ernst & Young, Fraunhofer, ESMAP.
Published by
Deutsche Gesellschaft für
Internationale Zusammenarbeit (GIZ) GmbH
Registered offces
Bonn and Eschborn, Germany
Sector Programm Sustainable Economic Development
Friedrich-Ebert-Allee 40 Dag-Hammarskjöld-Weg 1-5
53113 Bonn 65726 Eschborn, Germany
T +49 228 44 60-0 T + 49 61 96 79-0
F +49 228 44 60-17 66 F + 49 61 96 79-11 15
[email protected]
www.giz.de
Authors
Karen Ellis, with inputs from Smita Nakhooda
Overseas Development Institute, London
Design and layout
Schumacher. Visuelle Kommunikation
www.schumacher-visuell.de
Printed by
Top Kopie GmbH, Frankfurt
Printed on FSC-certifed paper
Photo credits
Page 1: Stocktrek Images/gettyimages, Page 12: Paul Langrock/Zenit/laif,
Page: 26 Benoit Decout/REA/laif, Page 34: Kirchgessner/laif, Page 37: LookatSciences/laif,
Page 40: Preau/Hemis/laif, Page 45: Roberto Caccuri/Contrasto/laif,
Page 17, 23, 30, 32: Thomas Imo/photothek
As at
November 2011
GIZ is responsible for the content of this publication.
On behalf of
Federal Ministry for Economic Cooperation
and Development (BMZ);
Division for development education and information
Addresses of the BMZ offces
BMZ Bonn BMZ Berlin | im Europahaus
Dahlmannstraße 4 Stresemannstraße 94
53113 Bonn, Germany 10963 Berlin, Germany
T +49 228 99 535-0 T +49 30 18 535-0
F +49 228 99 535-3500 F +49 30 18 535-2501
[email protected]
www.bmz.de
doc_195944262.pdf