Wednesday May 22nd, 2024
Download SceneNow app
Copied

Central Bank of Egypt Will Allow Establishment of Green Banks

The introduction of sustainable financing is expected to attract a new segment of investors who prioritise such initiatives.

Cairo Scene

Central Bank of Egypt Will Allow Establishment of Green Banks

The Central Bank of Egypt (CBE) will allow the establishment of green banks in the country.

The Egyptian banking market is currently undergoing the initial phase of capacity building in sustainable financing, with training programs and various discussion papers provided to banks for knowledge enhancement in this field.

This initiative aligns with the provisions of the Central Bank Law and the new banking system, allowing for the licensing of specialised banks to support clean and renewable energy projects, as well as those aimed at improving environmental quality.

According to the CBE's recently issued Financial Stability Report, green banks would provide access to low-cost capital financing for environmentally friendly ventures at favourable prices and terms. The CBE emphasises its support for sustainable financing and highlights that financing granted to companies considering environmental and social dimensions is considered low risk, contributing to the stability of the financial system.

The introduction of sustainable financing is expected to attract a new segment of investors who prioritise such initiatives, thus enhancing investment opportunities and foreign currency inflows. Furthermore, the issuance of green bonds will be encouraged, responding to the growing interest in environmental and social investments.

Banks aim to achieve long-term benefits for employees, customers, and society as a whole through incorporating environmental, social, and governance (ESG) elements into banking products, services, lending, and investment activities,

Additionally, by providing innovative financial solutions, opening new markets for financing, and reducing default risks, banks can generate profits while contributing to societal development, environmental preservation, and improved local and international reputation.

×