CAIRO: “The financial industry has to play by new rules,” Hassan Abdallah, CEO of Arab African International Bank said at a Cairo conference. At a workshop titled “Sustainable Finance” at this week's Euromoney Conference, panelists discussed ways to foster sustainable corporate businesses and economies, raising questions about Egypt's readiness to take the initiative to benefit from the opportunity presented by renewable energy. Representing the rise of responsible industry, Giorgio Boda, CEO of ASEC Cement, said that cement being a “heavy industry” in its severe environmental impacts, it is crucial to control its affects. “ASEC wanted to become a regional player and to do that it had to be competitive in all aspects, one of these is aspects is sustainability,” said Boda, adding that using technology that minimizes the impact on the environment also improved their relationships with stakeholders. “Actually, this direction makes … life much easier; we comply with the best standards so we can have cement plants running for longer periods,” said Boda. Energy consumption must also be improved, given the harmful effects of CO2 emissions and greenhouse gasses. Boda did not specify whether the company calculates its carbon footprint or whether it offsets carbon emissions, a common practice of many environmentally-conscious firms. Asked whether AAIB was funding any renewable energy projects, Abdallah said that financing sustainable development projects and responsible businesses was part of their corporate framework, but did not give further details. Hany Tawfiq, CEO of Arab Private Equity Foundation, focused on the various intrinsic barriers to financing renewable energy firms. He highlighted the growth of renewable energy on a global scale, citing global investments in the field which jumped from $22 billion in 2002 to $155 billion in 2008. “This is greater than investment in fossil fuels,” he said, adding that Egypt has to overcome many challenges to tap into the massive potential of this market. Tawfiq pointed to the technological gap as the first barrier that leads the Egyptian government to invest in traditional power plants. He added that there was an absence in the infrastructure necessary for venture capital or private equity renewable energy projects, as well as a lack of tax incentives. “The lack of political stability and the lack of policy stability is also a barrier,” added Tawfiq, contradicting comments made by outgoing Investment Minister Mahmoud Mohieldin in an earlier speech about political stability being a non-issue. “Renewable energy investments take 10 to 12 years for investors to get returns and unless investors are sure about the risks on this return, for example with regards to tax policies and overall business environment, investor confidence in this area would remain low,” said Tawfiq.
