IFC’s banking finance network upgrades Egypt’s performance to ‘Advancing’

The IFC is one of the financial arms of the World Bank.

The CBE said that this development comes in recognition of its efforts in sustainable finance.

The matrix provides a measure of progress made at the country level by member institutions to develop a sustainable finance framework.

The CBE said that this upgrade was announced in the SBFN Global Progress Report - 2024, issued by the network in April of this year, on the sidelines of the network's annual meetings.

The meetings were held in conjunction with the Spring Meetings of the International Monetary Fund and the World Bank in Washington, which concluded last week.

Since joining the SBFN in 2016, Egypt's classification has been upgraded four times. They moved from the "Preparation" stage, which included the "Initial Commitment" and "Formulation" phases, to the "Implementation" stage, which included the "Developing" and "Advancing" phases.

The CBE highlighted the progress they have made in sustainable finance, including issuing guidelines in 2021, capacity building for banking employees, and a finance gap study to identify challenges and opportunities in the sector.

This study resulted in the issuance of regulatory instructions for sustainable finance in November 2022 in accordance with international best practices and in line with the Egyptian banking sector and national trends.

The framework the SBFN uses to measure countries' progress is based on three main pillars. Each pillar assesses regulatory frameworks, strategies, disclosure requirements, and voluntary practices, as follows:

The first pillar is ESG Integration, which refers to the management of environmental, social, and governance (ESG) risks in the lending, investment, and operational activities of banks and financial institutions.

The second pillar is Climate Risk Management, which includes risk management frameworks, disclosure practices, data provision, and reporting that financial institutions can use to mitigate and adapt to climate change.

The third pillar is Financing Sustainability, which refers to the efforts of regulators, financial institutions, and banks to direct capital flows to activities that support climate and the green economy, as well as social goals, through products such as green bonds and sustainability-linked loans. Regulatory efforts also include the issuance of definitions, guidelines, classification mechanisms, supervisory and oversight activities, and the provision of necessary incentives and support.

The SBFN is one of the world's leading specialized entities in the field of sustainable finance and has a membership of 70 countries represented by 91 institutions and regulatory and government bodies from emerging markets working to promote sustainable finance to contribute to achieving local goals and priorities, developing banking sectors, and maintaining their stability.