IFC cooperates with Egypt in strengthening clean tech start-ups, enabling farmers to switch to solar
International Finance Corporation (IFC) announced Tuesday joining forces with the National Bank of Egypt and the Micro, Small and Medium Enterprise Development Agency (MSMEDA) to strengthen the clean technology entrepreneurship sector and boost Egyptian farmers’ access to finance for solar irrigation.
According to IFC, start-ups make up the bulk of players in the photovoltaic (PV) solar water pumping market in Egypt but are currently unable to scale up because of a lack of payment and finance options for customers, and a limited understanding of the sector.
“IFC’s specialized team will deliver technical assistance to four financial institutions, including the National Bank of Egypt, and MSMEDA to help develop a financial product for farmers to be able to afford purchase the pumps and assist with its piloting and roll out,” it clarified.
Around 960,000 diesel-powered water pumps are currently used for irrigation across Egypt, at a cost of about $250 million annually for the diesel. Replacing the pumps with PV systems would save farmers money in fuel and maintenance and help create a cleaner environment, IFC clarified.
“Through our partnership with IFC, MSMEDA will deepen its understanding of solar irrigation systems and develop a financial product for farmers to purchase solar irrigation pumps. Not only can farmers use a clean and free source of energy, but they can also irrigate more land and increase their production. This initiative comes in consistency and in full alignment with MSMEDA strategy in exploring new feasible financial products that are environmentally friendly and using clean technology,”Minister of Trade and Industry, and Executive President of MSMEDA Nevine Gamea stated.
For his part, Deputy Chairman of the National Bank of Egypt Yehia Abou El Fotouh said that his bank will work hand in hand with IFC to develop financial products for farmers so they can purchase solar-powered water pumps, adding that lack of knowledge about the investment needed for solar products often makes banks shy away from financing such projects.
“Egypt’s start-ups have identified major untapped potential for the use of solar amongst farmers,” IFC’s Country Manager for Egypt, Walid Labadi, said. “Our aim is to unlock this potential by supporting entrepreneurs and financial institutions in developing innovative business models that will boost the adoption of clean technology in the country.”
IFC stated that the project is being implemented in partnership with the governments of Denmark, Korea and Netherlands.
The IFC is a sister organization of the World Bank and member of the World Bank Group. It is the largest global development institution focused on the private sector in developing countries.