Egypt Hosts the Second MENA Carbon Forum

The latest carbon market developments and the future of carbon finance in the Middle East and North Africa (MENA) region were discussed during the second edition of the MENA Carbon Forum which was held in Cairo on 6-7 May, 2009.

The forum was hosted by the Government of Egypt and co-organized by the World Bank Carbon Finance-Assist Program, in partnership with the Agence Française de Development (AFD), the Fonds Français pour l'Environnement Mondial (FFEM), the International Emissions Trading Association (IETA) and the World Bank's Global Gas Flaring Reduction (GGFR) Initiative.

 "Egypt’s efforts in carbon finance need no introduction. The results speak for themselves: With 12 Clean Development Mechanism (CDM) projects in the UNFCCC pipeline and a hundred more to come. Egypt is one of the CDM leaders in the region," said Mr.. Emmanuel Mbi, the World Bank Country Director for Egypt, Yemen and Djibouti while addressing the opening session.
 
The second edition of the MENA carbon forum in Egypt built on the success of the first event in Morocco. The two-day forum brought together the regional stakeholders that are active in the carbon market: project owners and developers, CDM governance bodies, financial institutions, carbon market buyers and intermediaries, and service providers.
 
"Climate change is one of the most serious phenomenons facing the world today. This forum represents an opportunity to share and discuss the available mechanisms and mitigation measures to face the global challenge at hand," said Dr. Mawaheb Abou El-Azm, Chief Executive Officer of the Egyptian Environmental Affairs Agency (EEAA).
 
"I would like here to refer to the pioneering role of the World Bank in the area of financing CDM projects and carbon finance. Currently, there is notable cooperation between Egypt and the World Bank in the CDM field," added Dr. Abou El-Azm. 
 
The Middle East and North Africa is one of the regions most vulnerable to climate change, on account of water scarcity, a significant dependence on climate-sensitive agriculture, the concentration of population and economic activity in flood-prone urban coastal zones, and the presence of conflict-affected areas
 
As a region that depends heavily on exhaustible fossil fuels that constitutes 98% of its energy supplies; there is an immense need for developing sustainable energy patterns, diversifying energy sources, and increasing equality of access to energy services and promoting international & regional co-operation. 
 
However, there are encouraging trends. Some MENA countries have launched energy efficiency and renewable development programs for many years, and several others have decided to boost their programs while others are beginning to recognize the need to adopt improved standards of energy efficiency. The clean development mechanism (CDM) is one of the most important tools to support MENA countries to achieve their national sustainable energy objectives similar to the successful experience of the Asian countries such as China and India.

"The fight against climate change is a global challenge. We must put our efforts together so that the increase of 2° threshold is not exceeded….The challenge is not only to limit the impact but also to prepare for the adaptation to climate change. Each country must work on the development of national adaptation strategies," said Mr.. Jean-Hubert Moulignat, Director of the Agence Française de Development (AFD) in Egypt.

"The AFD, which is the main operator of the French Official Development Aid, participates in the joint financing efforts of projects against climate change, which reached up to 140M € for the MENA region in 2008," added Mr.. Moulignat. 
 
The MENA region is an attractive CDM destination as it is rich in renewable energy resources (i.e. solar and wind energy). Nevertheless, very few CDM projects are taking place in MENA countries with only 27 CDM projects have been registered to date.
 
The two main challenges facing many of these projects are: weak capacity in most MENA countries for identifying, developing and implementing carbon finance projects and securing underlying finance. As a result of such constraints, MENA region’s share in the carbon market has so far been less than 2%.
 
As for the role of the World Bank, it has been engaged in promoting carbon finance projects for over 10 years, and is also working to build capacity in several MENA countries, through the Carbon Finance Assist program. "You may already be familiar with the World Bank-administered Carbon Funds, totalizing 2 billion USD. But this is not all. At the World Bank’s Annual Meetings in October 2008 the Strategic Framework for Development and Climate was endorsed," added Mr. Mbi.
 
The Framework Strategy supports the Bank’s primary goals of development and poverty alleviation while taking into account the challenges brought on by climate change.  As part of implementing this framework strategy, the Bank has committed to a number of major initiatives focusing on the greater integration of climate change. 
 
These include a commitment to operationalize, execute, and share lessons from the Climate Investment Funds (CIF) including the Clean Technology Fund (CTF), the Carbon Partnership Facility (CPF); and the Global Environment Facility (GEF) to promote packaging of its development financing instruments with these climate-mitigation instruments; and to increase the share of its financing for energy efficiency and renewable energy by an average of 30% per year.
 
A draft result of a study commissioned by the WB to estimate the CDM market potential in MENA region focusing primarily on the energy sector was presented and discussed during the forum. The study made a diagnosis of bottlenecks currently prevent these projects from happening, and formulate recommendations to promote CDM implementation in the region. 
 
On the sidelines of the forum, a carbon investment Trade Fair was held that created ample opportunities for networking and business development.   Specifically, matchmaking sessions enabled potential CDM project participants and developers to showcase their projects to interested parties, including investors and carbon buyers.

At the Opening Session: Mr. Emmanuel Mbi, the World Bank Country Director for Egypt, Yemen and Djibouti; Dr. Mawaheb Abou El-Azm, Chief Executive Officer of the Egyptian Environmental Affairs Agency (EEAA); and Mr. Jean-Hubert Moulignat, Director of the Agence Française de Development (AFD) in Egypt.