Egypt and Germany on Sunday signed a €50m ($54m) debt swap agreement to finance projects to connect two wind power stations to the national grid, Egypt's electricity ministry said. The agreement was signed by an official from the German development bank KfW and the head of the Egyptian Electricity Transmission Company (EETC), witnessed by Minister of Electricity Mahmoud Essmat. Under the agreement, the amount will be converted into a grant from the German government and will be made available in two equal tranches of €25m. The funds will be used to finance two projects to connect wind power stations in the Ras Ghareb and Gabal El Zeit areas in the Gulf of Suez to the national grid, with the aim of encouraging private sector participation in renewable energy projects. The ministry said the agreement is part of the German government's support for Egypt's electricity and renewable energy sector, and its efforts to reduce carbon emissions and transition to clean energy. The electricity sector has previously signed two debt swap agreements with Germany worth €75m to strengthen the national grid's capacity to absorb renewable energy, partially finance the second phase of a hydroelectric power plant rehabilitation project, and establish a centre for managing distributed energy from renewable sources. Essmat praised the depth of relations between Egypt and Germany and highlighted the ongoing work to transform the electricity grid from a conventional to a smart network. He noted Egypt's interest in diversifying its energy mix and increasing the contribution of renewables, in line with the national energy strategy. The strategy aims to increase the share of renewable energy to over 42% by 2030 and to more than 65% by 2040.
