What is happening
Efforts to protect the environment and combat climate change are becoming increasingly noticeable across the North Africa region. This sharpened focus has manifested itself in various initiatives in Egypt.
The Ministry of Environment has campaigned to increase public awareness of the environmental hazards of single-use plastics and has been promoting environmentally friendly alternatives, such as biodegradable and paper bags. The infamous “winter black cloud” was averted in 2019 as the farmers switched from burning to processing almost 80% of waste from rice cultivation into compost. Which was subsequently sold and put into productive purposes including animal feedstock, fertilisers, and even furniture production. Another sign of change has been the “Youth for the Nile” initiative, launched to continuously clean up the Nile River of waste in collaboration with young volunteers.
What Actis is doing
At Actis, we are thought-leaders on responsible investment and thus have consistently supported and endorsed our (current and ex) portfolio companies in the implementation of initiatives to reduce environmental impact.
Egypt-based snack food business Edita, a former Actis portfolio company, made a number of energy efficiency improvements that delivered a 20% reduction in energy consumption and invested in new chillers using 30% less water during our investment, saving the company approximately US$1m per year in operational expenditure. In 2017, it also invested in a state-of-the-art wastewater treatment plant to improve water quality and increase recycling of waste, and undertook a conversion from LPG cylinders to natural gas. These moves contributed to a successful high value sale in a difficult business climate in 2017.
At another former portfolio company, El-Rashidi El-Mizan, we supported the company in its conversion from a water-heavy, largely manual sesame extraction process into a fully automated production line that used considerably less water and was much more environmentally friendly.
These environmentally friendly measures in our portfolio companies led to considerable cost savings through the reduction in energy and water consumption, thus making them perfect examples of values driving value.
Cleopatra Hospital Group, one of Actis’ current portfolio companies, is also actively working to minimise its environmental footprint and has undertaken a complete infrastructure renovation plan to ensure compliance with international environmental standards. It has also launched an initiative to replace electric boilers with solar heaters at one of its hospitals, leading to a significant reduction in its consumption of fossil fuels and electricity consumption, while giving access to an abundance of clean energy for heating with no CO₂ emissions.
Last but certainly not least, Egypt’s environmentally friendly policies would not be the same without its remarkable shift towards clean energy sources, particularly with the development of one of the world’s largest solar parks in Benban. The development of the park is part of Egypt’s plans to produce 20% of its energy needs from renewable sources by 2022 and 42% by 2035, both of these targets are well on their way to being met, and potentially overachieved.
Actis supported Egypt’s thrust into clean energy, and our investee company Lekela is currently building one of the largest wind farms in North Africa. The West Bakr Wind Farm, located in the Gulf of Suez, is a 250 MW Wind Farm, which is due to start commercial operations next year.
Actis is also supporting Egypt’s flagship three-year program on promoting gender equality in the renewables sector. This ties in well with Actis’ commitment not just to scaling renewables but also focusing on an inclusive transition to a low carbon future.