Hassan Abdalla, Governor, Central Bank of Egypt

In Egypt, Inclusive Green Finance (IGF) is playing a pivotal role in advancing progress on environmental issues, economic development, and social equity. It represents the intersection of two key objectives: transitioning to a low-carbon economy and empowering underserved communities, especially small and micro-enterprises.

When we integrate environmental considerations into banks’ activities, including financial inclusion, we can channel capital toward more sustainable sectors, mitigate climate-related financial risks, attract sustainable investments, and foster innovation and growth in vital sectors such as smart agriculture and renewable energy. As such, Inclusive Green Finance represents a core pillar in achieving both the Sustainable Development Goals (SDGs) and  Egypt’s Vision 2030, with the aim of building a strong, resilient, and sustainable economy that benefits everyone.

How can regulations drive progress?

The main challenge in developing Inclusive Green Finance in Egypt was the limited awareness among clients and banks regarding its true value – not only in achieving environmental goals, but also in creating economic opportunities, reducing risks, and promoting financial inclusion. We addressed this through issuing a clear regulatory framework for sustainable finance – starting with guiding principles, then followed by binding regulations. We have also launched awareness and capacity-building programs to foster the banking sector’s understanding and implementation capabilities.

Another significant challenge was the lack of data and the absence of a unified framework to define what constitutes a green or social activity. To address this, the Central Bank of Egypt (CBE) has incorporated clear definitions of green and social activities into its periodic sustainable finance reports. This approach unifies concepts and improves data quality, allowing us to build a national database.

The vital role of partnerships

Central banks’ national and international partnerships are required to advance the Inclusive Green Finance agenda. When government entities and the private sector work together, efforts can be aligned, visions unified, and available resources leveraged to integrate economic and environmental policies. By collaborating with global organizations and development finance institutes, we can mobilize financial resources, facilitate access to concessional financing, and enable knowledge transfer and the exchange of best practices.

By working across these multiple areas (establishing the regulatory framework, building awareness and capacity, generating data, and forming partnerships), the CBE has enhanced its developmental impact and positioned Inclusive Green Finance as a key driver of sustainable and inclusive economic growth. We are still in the early stages of the journey, but IGF’s potential to green the financial sector, protect vulnerable groups, and accelerate the transition to a sustainable future is clearly demonstrated.