Egypt is planning to move away from its previous model of development, which was based on the use of its own, non-sustainable resources, and instead adopt practices that are environmentally sound, climate-friendly and socially equitable; the German government, together with other interface organisations, is helping Egypt to make this shift.

The annual costs of preventing and remediating environmental damage are put at around five per cent of the country’s gross domestic product (GDP); this is nearly twice as high as in western industrialised countries. Despite a range of endeavours, Egypt has not yet succeeded in reducing air pollution to an internationally acceptable level. In addition, the deteriorating quality of the coastal waters is harming tourism, which is an important source of foreign currency. The low level of compliance with acceptable environmental standards restricts the export opportunities of Egyptian industry.

By international standards Egypt’s specific per-capita greenhouse gas emissions are low; however, overall CO2 emissions have almost doubled since 1990, making Egypt the largest emitter of greenhouse gases (GHGs) in the Middle East and North Africa (MENA) region.

The increases in GHG emissions and air pollution are attributable mainly to thermal power plants and the use of energy in industry and transport. The situation is exacerbated by the low efficiency of energy use in buildings as well as in other areas. Energy consumption in transport, industry and power generation is rising at about eight per cent per year; it now absorbs all the oil that Egypt produces and most of its natural gas. In addition, extensive financial resources are required to enable the country to keep pace with its growing energy requirement.

For reasons of social and industrial policy, Egypt subsidises not only food but also electricity, gas and oil products. This reduces the incentive to use energy efficiently or to make use of renewable energies. Making appropriate changes without constraining the disposable income of the lowest earners or jeopardising the development of small and medium-size industrial businesses poses a major challenge for the Egyptian government.

In April 2007 the government revised upwards its previous targets for the expansion of renewable energies; by international standards Egypt is now notable for having adopted targets similar to those of the EU. It thus intends to increase the proportion of energy from renewable sources – mainly wind – from its current level of 12 per cent to 20 per cent by 2020. Because of its excellent solar potential Egypt could in the long term become an exporter of electricity to Europe.

GTZ assists Egypt in three areas:

• Policy advice, capacity development and development of implementation initiatives for energy efficiency and renewable energies:
• through a high-level Egyptian-German Joint Committee on Renewable Energy, Energy Efficiency and Environmental Protection – JCEE
• through regional projects such as the MENA Regional Centre for Renewable Energies and Energy Efficiency (RCREEE) and programmes carried out for the EU on regional energy integration (Euro-Mediterranean Energy Market Integration Project – MED EMIP) and on energy efficiency in buildings
• Capacity development in connection with development of the private sector
• Capacity development in connection with the development of a regulated waste management system (in preparation in 2009).

In all three areas there is close cooperation and coordination with other German interface organisations, other organisations involved in scientific, political and economic cooperation with Egypt, and other donors.