Egypt’s Contact Wants to Boost Sustainability With ‘Green Finance’

Egyptian financial firm Contact wants to promote sustainability with a new product dubbed “Green Finance.”

According to a Monday (Dec. 26) news release, the product will fund projects such as solar panels, irrigation systems, and greenhouses, as well as sustainable farming efforts.

Green Finance lets consumers pay in installments – with payment plans of up to five years – with “monthly and quarterly repayment systems reflecting Contact’s understanding of agricultural activity and its cash flow cycle.”

The release adds that Contact hopes to introduce other green products “to achieve modern developments that the country seeks, in terms of preserving the environment, protecting agricultural areas, reconstructing infertile areas, and converting them into green spaces which leads to a better future.”

Contact is launching this program at a time when supply chain financing is going green as businesses worldwide work toward their sustainability goals, as PYMNTS wrote last week.

The increasingly popular practice, known as “sustainable supply chain finance,” involves assessing and providing loans that take into account suppliers’ environmental, social and governance (ESG) performance.

For large companies, it is an increasingly important part of their broader ESG efforts and helps them ensure sustainable sourcing and shrink the carbon footprint of their supply chains.

“But to pull it off, businesses need the help of banks. After all, banks provide the capital for most supply chain financing, not buyers themselves,” PYMNTS wrote.

For example, multinational bank Standard Chartered recently teamed with Middle Eastern retail giant Majid al Futtaim, which operates the Carrefour brand in the MENA region, to reward the retailer’s suppliers that meet sustainability criteria with more favorable financing.

By attaching ESG considerations to its finance solutions, Majid al Futtaim can help empower MENA suppliers to invest in more sustainable technologies while accelerating the region’s shift to a greener economy.

That shift is happening elsewhere as well. The close of last month’s COP27 climate summit in Egypt saw some major climate tech investment deals signed by participating nations.

For example, the European Investment Fund (EIF), a private equity (PE) and venture capital (VC) financier owned by the EU member states, has pledged investments totaling €247 million, including €75 million targeted at increasing financing for greenfield energy and circular economy projects in Spain and providing financing for renewable energy infrastructure development in Europe as a whole.

But even prior to COP27, 2022 was a good year for climate tech funding. A recent report by PwC found that climate tech investment in the 12 months to Q3 2022 represented more than a quarter of all VC invested worldwide.

And despite a slowdown in VC investing in the second half of the year, climate tech has remained resilient, with five of the 10 biggest VC deals in the most recent quarter going to startups in the space.