Economic development has undoubtedly improved the lives of billions all over the world, and it remains a fundamental objective for all countries. The increase of wastewater levels alongside economic development, however, poses a challenge to the aims of achieving this development sustainably, but it also presents a significant opportunity to leverage this waste into a resource to meet needs across many sectors.
It is not just potable water that is an asset: wastewater is an equally important resource whose value can be harnessed. Urging world leaders to prioritize action on water, the United Nations argues that wastewater, discarded into the environment every day, once treated can help meet the needs for freshwater as well as for energy and agriculture. Recognizing water’s place at the core of sustainable development, Egypt has outlined in its Vision 2030 the importance of water resources development and rehabilitation of pumping stations.
As the Egyptian population and water demand increase, more freshwater gets allocated to domestic consumption, leaving the agricultural sector vulnerable. Some countries have started using wastewater for agricultural irrigation, accounting for around 10% of all irrigated land. Likewise, Egypt is now prioritising the implementation of wastewater treatment projects as a viable alternative to reduce pressure on its single water source – the Nile. With 80% of wastewater having flowed back into the ecosystem without being treated or reused in recent years, the moment is ripe to implement the concept of circularity for simultaneously meeting populations’ needs while growing sustainably and minimising countries’ environmental impact.
Sustainable financing delivers benefits for the environment and the community – The case of Abu Rawash Wastewater Treatment Plant
The private sector can play a key role in supporting sustainable development projects – including wastewater treatment infrastructure – in Egypt and beyond through sizeable and valuable financing solutions and investment.
A prime example of this are the upgrades to the Abu Rawash Wastewater Treatment Plant, which started in 2016 by three joint venture partners buttressed by Mashreq’s USD 55 million working capital loan for financing the project through completion. Project milestones include improving the primary treatment system of 1.2 million cubic meters per day to include secondary treatment and expanding the plant’s capacity to 1.6 million cubic meters per day from both primary and secondary treatments. These principal objectives improve the quality of the drainage system and, by extension, exceed the national standards for sewage discharge into rivers and the sea.
The treatment project is slated to directly benefit over 8 million people in the service area covering the eastern side of the Nile River and the Cairo-Alexandria desert road, primarily in the Giza Governorate of the Nile’s West Bank, with positive spill over effects in the Monufia, Beheira, Kafr El Sheikh, and Sharqia Governorates. Secondary beneficiaries include residents in the plant’s downstream villages with a total population of over 400,000. Finally, the project has generated 1,600 jobs of which 20% have been taken by women, helping advance the country’s vision for social inclusion.
Finance meets the needs of ambitious development projects – New Alamein City
As a direct response to the demand for creating next-generation smart cities, Egypt has embarked on the ambitious New Alamein City project, located on the North Coast, and designed to meet the high standards of what it means to be a fourth-generation city. Among a myriad of factors that come into play in the construction of a new city are the availability of adequate water sources, forecasted water usage, and conservation and circularity of the resource.
To meet these challenges head on, a E£ 1.8 billion wastewater treatment plant will be created to serve the 3 million people who will live in New Alamein. With a daily capacity of 90,000 m3, the multi-phased treatment plant will meet the city’s water demand while protecting the local environment and water resources from pollution and reducing the health risks from untreated wastewater discharge into drains and canals. Naturally, the bigger the megaproject, the more important it is to have appropriate financing channels and available capital. For the New Alamein City wastewater treatment project, Mashreq provided the joint venture partners a E£ 121 million working capital facility for the project’s successful and timely completion.
The wastewater treatment project will create positive economic impact, elevate living standards in the face of climate change, and fulfil international sustainable development goals that strive for clean water and sanitation for all, in addition to creating employment opportunities for the local community from construction to maintenance.
Funding is the key for achieving sustainable development goals
Maintaining strong channels for financing is crucial not only to elevate standards of living, but also to confront growing insecurity about water resources availability and to assuage simmering anxieties at the international level directed at managing available water resources. Formalised financial lending programs that specifically target sustainability initiatives are crucial to meet the challenges of the 21st century, especially in water-stressed regions such as MENA with traditionally low availability and access.
In this context, environmental, social, and governance (ESG) considerations continue to be the drivers of financial institutions’ decision-making where financing channels can impact sustainable development well beyond wastewater treatment.
Since inception in 1967, Mashreq has adopted the principles of social responsibility, integrity, and transparency into every aspect of its business. Mashreq has now joined the United Nations Global Compact initiative, which will further support the Bank’s efforts to embed strong ESG practices across the organization. Mashreq has financed and facilitated deals worth USD 15.5 Billion in sustainable financing as of end 2022. Supporting achievement of the UN Sustainable Development Goals through sustainable loans, sustainable bonds, project financing etc. will continue to remain a key priority for Mashreq.
By Amr El Bahey, Chief Executive Officer, Mashreq Egypt