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EBRD supports the reduction of gas flaring in Egypt

By Nibal Zgheib

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The European Bank for Reconstruction and Development (EBRD) is working to combat energy waste in Egypt, with a workshop addressing problems that are linked to gas flaring in the country’s petroleum industry.

As part of the petroleum production process, around 140 billion cubic metres of associated petroleum gas (APG) are flared annually throughout the world, wasting large amounts of energy resources and contributing to pollution.

Egypt ranks among the 20 top gas-flaring countries in the world. Capturing the nearly two billion cubic metres of gas flared in the country would be enough to provide five per cent of national energy needs and add US$ 300 million a year to the Egyptian economy.

At its workshop, the EBRD discussed the findings of its study on “Gas Flaring Reduction in Egypt”. The study was launched in 2014 as part of the Bank’s efforts to reduce flaring and enhance cooperation with the Ministry of Petroleum and Mineral Resources, the Egyptian General Petroleum Company (EGPC), Egyptian Natural Gas Holding Company (EGAS) and the Ganoub El-Wadi Holding Company (GANOPE).

Attended by Khaled Abdel Badie, Chairman of EGAS, as well as experts from state and private oil and gas companies, discussions focused on the new technologies, business approaches and regulations that can reduce gas flaring. In addition, new policy options were presented, including the potential role of co-financing through international climate policy schemes.

“The oil sector is expected to remain an important contributor to Egypt’s GDP growth prospects in the coming years as well as providing essential energy security for the country. We hope that this workshop will contribute to incentives and programmes aimed at further reduction of gas flaring in Egypt which can have not only significant economic benefits but will also contribute to meeting the best international environmental standards,” said Philip ter Woort, Director, EBRD Operations - Egypt.

Eric Rasmussen, EBRD Director for Natural Resources, commented: “Building on the results of the study, over the last two years the Bank has already financed over US$ 200 million in projects to reduce flaring in Egypt and is committed to looking into further projects.” 

Terry McCallion, EBRD Director for Energy Efficiency and Climate Change, remarked: “In the future, flaring in Egypt will increasingly come from smaller production sites, which are often in remote locations. This represents a challenge in terms of finding economically viable solutions. However, new technologies and business approaches are emerging that can make previously uneconomic investments commercially attractive as well as delivering good environmental impact.”

In 2015, the EBRD signed a Memorandum of Understanding with EGPC, EGAS and Ganope under the auspices of the Ministry of Petroleum of Egypt. The agreement aims to strengthen cooperation among the parties in order to reduce the level of greenhouse gas emissions and air pollution, help with the implementation of international best practices and standards, increase the competitiveness of the sector and contribute to energy security in Egypt.

With its Green Economy Transition approach, launched ahead of the COP21 climate talks in Paris, the EBRD is strongly committed to supporting its countries of operations, and Egypt in particular, in pursuing low-carbon sustainable development. The Bank was among the first to endorse the World Bank’s "Zero Routine Flaring by 2030" initiative, which aims to end routine gas flaring by 2030.

Sustainable energy is very important for the southern and eastern Mediterranean region and the EBRD has launched a US$ 250 million financing framework for private sector renewable energy generation in Morocco, Egypt, Tunisia and Jordan  to help this import-dependent region develop clean, secure electricity.

The EBRD has invested over €1.6 billion in Egypt through 33 projects since the start of its activities there at the end of 2012. The Bank’s investments include the financial sector, agribusiness, manufacturing and services as well as infrastructure projects such as power, municipal water and wastewater and contributions to the upgrade of transport services.

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