Egypt and Germany have signed a €50 million ($54 million) debt swap agreement to fund grid connection projects for two wind power stations, representing their cooperation on Egypt’s renewable energy expansion.
The deal was signed by the German development bank KfW and the Egyptian Electricity Transmission Company (EETC).
Under the arrangement, the amount will be converted into a grant from Germany. It will be made available in two tranches of €25 million each.
The funding will support the connection of wind power stations in the Ras Ghareb and Gabal El Zeit areas in the Gulf of Suez to the national grid.
Minister of Electricity Mahmoud Essmat stated that the move aims to encourage private sector participation in Egypt’s renewable energy market.
This latest agreement builds on two previous debt swap deals with Germany worth €75 million, which were deployed to strengthen grid capacity and support Egypt’s ongoing clean energy transition.
The Ministry noted that the earlier phases financed part of the second stage of a hydroelectric plant rehabilitation project and funded a new centre to manage distributed renewable energy.
Why this matters
Egypt is expanding reforms to diversify its energy supply and reduce its carbon emissions.
The Minister of Electricity emphasized the strong partnership between Egypt and Germany and said the project will play a transformative role in the country’s electricity grid.
He noted that the initiative aims to increase the share of renewable energy in Egypt’s power mix to over 42% by 2030, with a longer-term goal of more than 65% by 2040.
According to the Minister, the agreement is part of broader efforts to transition the grid from a conventional network to a smart system capable of managing higher volumes of variable green energy.
The project is also for grid integration, enabling Egypt to absorb more wind and solar capacity and attract greater private sector participation in renewable energy development.
What you should know
In June 2023, Germany signed a €54 million debt swap that redirected Egypt’s repayments into financing transmission system upgrades.
The project funded two substations and grid connection for three separate wind farms with around 1,200MW capacity.
In May 2025, Egypt and Germany signed another €21 million tranche to enhance renewable supply security.
The initiative pushed total bilateral debt swap cooperation between both countries to around €297 million.
The finance ministry and Central Bank of Egypt have said debt swaps will remain a key tool for climate projects over the next few years.
