At the MENAREC III-Conference on Renewable Energies in Cairo Federal Minister Sigmar Gabriel signed a bilateral agreement with Egypt on joint climate protection projects. Similar agreements have been negotiated with other states in the region (e.g. with Israel) and will soon be ready to be signed.
On the basis of these agreements (Memorandum of Understanding) companies are able to obtain emission trading credits at relatively low costs by investing in projects for clean development projects in developing countries which have the additional benefit of reducing green house gas emissions. These credits can then be used by the companies within the European Emissions Trading Scheme. The economic benefit for the companies achieved by investments in other countries or by directly buying emission credits at costs below the level prevalent at home thus benefits the climate.
One of the major challenges for global climate protection is the enormous rise in energy needs in the developing countries. Not only large industrial threshold countries like China and India are experiencing a drastic rise in energy needs, the same holds true for the Arab region. The current rate of approximately 10-15% of the EU energy demand will – if nothing changes – match the European level of demand by the middle of the century. As against other Arab countries Egypt does not have fossil fuel resources such as oil and gas and is thus faced with a particular challenge. Investments in renewable energy sources and an efficient use of all energy sources will be the key to Egypt’s energy future. Solar energy, wind und biomass play an important role. Projects in the transport sector, the water supply sector and in waste management are also important fields of action for investments in climate protection.
In addition to the signing of the Memorandum of Understanding it was also possible to conclude an agreement between the KfW banking group and the Egyptian New and Renewable Energy Authority (NREA) on the purchase of emission credits from a wind power project in Zafarana with an installed capacity of 80 Megawatt. The wind park, located in a particularly windy region at the Gulf of Suez, is expected to become operational at the end of 2007 and yield an annual amount of approximately 168,000 emission credits.
The Federal and the Egyptian Environment Ministries agreed in the Memorandum of Understanding not only to set the framework for company-based initiatives but also to establish direct contacts between German and Egyptian partners for the development of specific projects.
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