A focus on NEX-LABS Best Practices in Egypt: highlights on the importance of strategic orientation to support innovation in Water, Energy and Food

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During the past months, NEX-LABS project partners have worked with an incredible commitment to defining a list of their country-specific best practices, which are helpful to build a resilient, sustainable, and inclusive Mediterranean ecosystem for water, energy and food.

Best practices are a fundamental ingredient to building a catalogue which can be useful for policy building and for improved local entrepreneurship and community resilience. 

The survey conducted in Egypt, together with research papers, helped define four features of the country’s sustainable development in the nexus of water, energy and food: 

  1. Established Strategic Orientation, 
  2. Burgeoning Business Supporting Programs, 
  3. Adequate Scientific Knowledge Creation, as well as 
  4. Increasing Collaboration and Networking. 

In the build-up to COP27, the Egyptian government has launched the “Nexus of Water, Food and Energy (NWFE)”, an innovative and ambitious programme comprising 9 projects with a total cost of US$14.7 billion. It is a transformational strategy that moves from a narrow sectoral approach to a more focused and structured model of linkages between sectors. The NWFE programme, which was officially launched on 8 November 2022 at the Egypt pavilion at COP27, has three main pillars:  water, food, and energy. The Government of Egypt has called on development partners to channel their investments under a Water-Food-Energy nexus and has chosen three lead agencies: the African Development Bank (AfDB) for the Water pillar, IFAD for Food and Agriculture, and the European Bank for Reconstruction and Development (EBRD) for energy.

As for STRATEGIC ORIENTATION, between 2016 and 2020, the country aimed to create 3 million decent and productive jobs and to increase GDP growth by 8%. In 2016 the Egyptian GDP growth was 4.5%, and it grew to 5.6% in 2019, but due to the  COVID-19 outbreak, it dropped to 3.6 in 2020, and it didn’t reach the estimated 8% in the initial strategic plan. According to Forbes, the growth rate for GDP will rise by 6.6% in the 2021/2022 Fiscal year , meanwhile the government is about to release the new 2022/2026 industry and trade strategy, which might reflect on the achievements of the prior plan. 

This transition is supported by strong investments in research and innovation. According to the nationally determined contribution that the Egyptian government submitted to the UNFCCC in July 2022, Egypt is planning to invest USD$ 196 billion in climate mitigation actions and USD$ 50 billion in climate impact adaptation actions (Updated Nationally Determined Contributions 2022).

Due to the financial limitedness of the country, like other developing countries, this planned investment is conditioned on receiving international support from developed countries which is promised according to article 9 of the Paris agreement (UNFCCC 2015) and should be applied through the “loss and damage fund” which international parties agreed on establishing it in Conference Of Parties 27 COP27 hosted in Sharm El Sheikh, Egypt 2022 (UNFCCC 2022).

As for BUSINESS SUPPORTING PROGRAMS, the government is planning to streamline bureaucracy through digital and technological solutions and incentivize new business establishments (easy and fast digitalized procedures). Not only will MSMEs be supported, but also the self-employed. Egypt has established 16 new Venture Capital firms, and it plans to continue providing financing and training, which are key to supporting sustainable capacity building of its business ecosystem. 

According to the National Strategy Climate Change 2050, Egypt is committed to Enhance Climate Financing Infrastructure ( Goal 4 of the NSCC): Promoting local green banking and green credit lines “The banking sector is one of the most important sources of project financing in the private and public sectors. The banking entity sets a set of requirements that the recipient of support must comply with before approving the financing. Those set of requirements can include environmental and social aspects to turn those investments into green ones. Following the example of the international banking community, such as The World Bank and other international sources of financing, giving adequate attention to micro, small and 32 Egypt National Climate Change Strategy (NCCS) 2050 medium enterprises (MSMEs) to benefit from financing opportunities” .

As anticipated in Goal n.5 of the NSCC, SCIENTIFIC KNOWLEDGE CREATION needs to be supported. Scientific research represents an essential element of preparedness to address the consequences of climate change and benefit from global experiences. The country is committed to establishing new private research centres and has allocated 1 million euros per annum for scientific missions abroad. As part of the solution, the country is also reactivating 85 qualified scholars in the diaspora. This talent acquisition and reshoring aim to help strengthen competency and productivity in the fields of Chemistry, Medicine, Material Sciences, Mathematics, Physics, and Agriculture. More specific investments will be made for research and development in water, food and energy issues. The main program called Jesor (bridges for development) was initiated by the the Academy of Scientific Research and Technology (ASRT) in 2015 to build bonds with Egyptian scholars in the diaspora under the title “joint collaborative efforts of Egyptian Expatriates and Scientific organizations towards tackling R&D challenges”. 

The improvement of public and private funding to improve Egypt’s position in the Mediterranean, as well as in the world for WEF couldn’t happen without COLLABORATION AND NETWORKING.

The country has established new schemes for public-private partnerships and technology alliances. It aims to support innovation in rural areas and link it to the centralized initiatives in main cities. The existence of technology transfer will be taken care of by the Technology transfer offices located in 50  most Egyptian universities and research institutes supported by a program called Technology Innovation Commercialisation Offices program financed by the Academy of Scientific Research and Technology (ASRT). These offices exist, for example, at Cairo University, Fayoum university, the national institute of oceanography and fisheries, and the Arab academy of science technology and maritime transportation. Academic research must be part of the solution for shared economic value. Energy, physics, nanotechnology, and nuclear research networks are joining forces to find better solutions for a just energy transition.

As an example of what is being done, in 2017, the government established MSMEDA (Micro Small Medium Entreprises Development Agency to increase harmony and join efforts targeting MSMEs in Egypt. In 2020, the Egyptian government issued a unified law defining Micro-Small-Medium Enterprises (MSMEs) across industrial sectors (Law No. 152/2020). The new law aims to attract projects that are outside the Egyptian authorities’ control (the Informal Sector of the Economy) and embrace them under its umbrella due to reduce the informal sector of the economy with a view to promoting employment in the formal sector and, in this way, ensuring the full enjoyment of economic and social rights by all workers. Moreover, it aims to legalize SME’s status under Egyptian laws.

For the first time, the Egyptian 2030 strategy included knowledge, innovation, and technology pillars to drive all ministries' strategies and action plans toward a more innovation-based circular economy. Egypt was also the first country in the region to issue green bonds to finance sustainable green innovation activities in all sectors, including WEF.

Download the NEX-LABS Best practices booklet here

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