Banking leaders underscore crucial role of public-private partnerships in advancing development

Daily News Egypt

03-05-2025

Senior leaders from Egypt's banking sector have reiterated the vital importance of public-private partnerships (PPPs) in supporting economic development during the Arab Banking Conference held recently in Cairo.
Tarek El-Kholy, Deputy Governor of the Central Bank of Egypt (CBE), emphasized that PPPs help ease the fiscal burden on national budgets while promoting equitable risk-sharing between the public and private sectors.
El-Kholy acknowledged that the Arab region faces numerous challenges—including climate change, elevated financing costs, and global economic volatility—but argued that PPPs offer exceptional opportunities under such conditions. By fostering collaboration and coordination among decision-makers and stakeholders, PPPs can strengthen Arab economies and accelerate progress.
He stressed that today's complex economic environment—marked by both challenges and opportunities—demands a departure from traditional frameworks and a shift toward more innovative, flexible mechanisms for development financing.
'Public-private partnerships have become a strategic imperative—not only as a source of funding, but also as a means to accelerate implementation, maximize operational efficiency, and ensure fair risk distribution,' El-Kholy said.
He cited successful PPP experiences within and beyond the Arab world, particularly in key sectors such as infrastructure, renewable energy, education, healthcare, transportation, telecommunications, and support for small and medium-sized enterprises. These sectors, he noted, are essential drivers of inclusive and sustainable growth.
El-Kholy highlighted the evolving role of the Arab banking sector, stating that banks are no longer confined to traditional lending roles. Today, they act as co-designers of financial solutions, offering instruments tailored for long-term development projects, particularly in green and climate finance.
He called on Arab states to adopt bold strategies to achieve the Sustainable Development Goals (SDGs), which include ending poverty, ensuring access to quality education and healthcare, and combating climate change. Achieving these goals, he added, will require innovative and flexible financing models that mobilize resources from all stakeholders—underscoring the indispensable role of PPPs.
El-Kholy also noted that one of the most urgent challenges for emerging markets such as Egypt—and for many Arab countries—is the need to attract greater domestic and foreign investment into large-scale development projects. This is especially pressing amid a global push toward digital transformation and innovation.
He emphasized that strengthening PPPs depends on robust institutional and legal frameworks, effective dispute resolution mechanisms, and transparent governance. These elements, he argued, are essential to building investor confidence and attracting capital in a competitive global landscape.
He added that Arab central banks can play a catalytic role in encouraging commercial banks to finance development projects while enhancing financial stability—a cornerstone for building trust among stakeholders.
Mohamed El-Etreby, Chairperson of the Union of Arab Banks, Chairperson of the Federation of Egyptian Banks, and CEO of the National Bank of Egypt, described banks as strategic development partners central to the success of PPPs. Banks, he said, not only provide long-term financing for capital-intensive infrastructure projects but also play advisory roles in structuring those ventures.
El-Etreby noted that banks mitigate PPP-related risks through financial guarantees and collaboration with investment insurance agencies. Moreover, they partner with sovereign wealth funds, global financial institutions, and capital markets by listing projects on stock exchanges—opening new pathways to attract foreign investment and enhance transparency.
He cited successful PPPs in Egypt, including the Abu Rawash wastewater treatment plant—the largest of its kind globally—as well as the Aswan solar energy project and the New Administrative Capital, which he described as the world's largest public-private partnership initiative.
El-Etreby acknowledged the current phase of global and regional volatility, uncertainty, and instability, and stressed the urgent need for unity and collaboration between governments and the private sector to tackle economic and social challenges facing the Arab region.
He warned that the Arab world faces strategic threats to its economic and social fabric, and stressed the importance of forging partnerships to reduce burdens on citizens, stimulate development, and maximize resource utilization.
He argued that PPPs offer a vital pathway to bridge the financing gap, enhance infrastructure, and promote innovation—by integrating the state's regulatory role with the private sector's execution capacity to support sustainable development.
'PPPs combine expertise, share risk, and deliver optimal efficiency,' El-Etreby said. 'The private sector's agility, innovation, and ability to undertake large-scale projects without straining public finances make it an indispensable partner. These partnerships also build trust among investors at home and abroad.'
Ashraf El Kady, CEO and Managing Director of United Bank, highlighted the importance of expanding PPPs to unlock new channels of development financing across the Arab world.
He emphasized that sustainable development remains one of the region's central challenges, requiring the promotion of Arab joint action and the adoption of a regional integration model. This is especially relevant, he said, as major regional projects—particularly those focused on climate adaptation—are key to achieving comprehensive development goals.
El Kady praised the efforts of the Egyptian government, Arab states, and the Central Bank of Egypt—alongside other Arab central banks—in advancing the SDGs through investment in human and scientific capital. He cited focused initiatives in healthcare, education, knowledge transformation, and scientific research and innovation.
Akef El-Maghreby, CEO and Managing Director of Suez Canal Bank, stressed that PPPs are now indispensable for implementing Egypt's major national projects. These initiatives, he added, represent promising investment opportunities that the private sector should actively pursue.
He noted that banks are involved from the early stages—assessing project feasibility and implementation potential. Since many of these projects have long payback periods, careful evaluation of contract types, risk factors, and financing conditions is essential to building resilient and sustainable funding models.
El-Maghreby outlined the two key stages of major development projects: the development phase and the financing phase. He emphasized that the success of the first significantly enhances the viability of the second.
He also noted that banks can evolve from direct lenders into financial intermediaries, while international financial institutions are often better positioned to participate in long-term ventures.
El-Maghreby highlighted prominent PPP successes, including the Benban solar park in Aswan—one of Egypt's largest renewable energy projects—and the monorail project, a model for green finance and sustainable development.
He called for increased focus not only on funding new initiatives, but also on supporting high-performing existing projects to facilitate access to capital and ensure investment returns—especially in strategic sectors like electricity, transport, and infrastructure.