Date of Submission to Coordination Unit

Date of Submission to Coordination Unit:

A.  GENERAL INFORMATION

1.  Activity Name

Green Growth: Industrial Waste Management and SME Entrepreneurship Hub in Egypt

2.  Requestor Information

Name:Eng. Mohamed Hammam / Title:Assistant to the Minister in charge of International, Regional and Arab Financing Institutions and Organizations
Organization and Address:
Ministry of Planning and International Cooperation (MoPIC)
8 Adly Street
Cairo, Egypt
Telephone: (+202) 2391 2815 - 2391 6214 / Email:

3.  Recipient Entity

Name: Eng. Hanan El Hadary / Title: Chairperson
Organization and Address:
Industrial Council for Technology and Innovation - Ministry of Industry and Foreign Trade
2 Latin America Street
Garden City, Cairo, Egypt
Telephone:(+202) 27921173 / Email:

4.  ISA SC Representative

Name:Mr. Jacob Kolster / Title: Regional Director, Egypt, Libya & Tunisia
Organization and Address:
African Development Bank
13 rue de Ghana B.P. 323
Tunis – Belvedere, TUNISIA
Telephone: (+216) 7110 2065 / Email:

5.  Type of Execution (check the applicable box)

Type / Endorsements / Justification
√ / Country-Execution / Attach written endorsement from designated ISA
Joint Country/ISA-Execution / Attach written endorsement from designated ISA / (Provide justification for ISA-Execution)
ISA-Execution for Country / Attach written endorsement from designated ISA / (Provide justification for ISA-Execution)
ISA-Execution for Parliaments / Attach written endorsements from designated Ministry and ISA

6.  Geographic Focus

Individual country (name of country): Egypt
Regional or multiple countries (list countries): NA

7.  Amount Requested (USD)

Amount Requested for direct Project Activities:
(of which Amount Requested for direct ISA-Executed Project Activities): / 1,940,000
Amount Requested for ISA Indirect Costs:[1] / 60,000
Total Amount Requested: / 2,000,000

8.  Expected Project Start, Closing and Final Disbursement Dates

Start Date: / 30th of September 2013 / Closing Date: / 30th of September 2016 / End Disbursement Date: / 31stof March 2016

9.  Pillar(s) to which Activity Responds

Pillar / Primary
(One only) / Secondary
(All that apply) / Pillar / Primary
(One only) / Secondary
(All that apply)
Investing in Sustainable Growth. This could include such topics as innovation and technology policy, enhancing the business environment (including for small and medium-sized enterprises as well as for local and foreign investment promotion), competition policy, private sector development strategies, access to finance, addressing urban congestion and energy intensity. / √ / Enhancing Economic Governance. This could include areas such as transparency, anti-corruption and accountability policies, asset recovery, public financial management and oversight, public sector audit and evaluation, integrity, procurement reform, regulatory quality and administrative simplification, investor and consumer protection, access to economic data and information, management of environmental and social impacts, capacity building for local government and decentralization, support for the Open Government Partnership, creation of new and innovative government agencies related to new transitional reforms, reform of public service delivery in the social and infrastructure sectors, and sound banking systems. / √
Inclusive Development and Job Creation. This could include support of policies for integrating lagging regions, skills and labor market policies, increasing youth employability, enhancing female labor force participation, integrating people with disabilities, vocational training, pension reform, improving job conditions and regulations, financial inclusion, promoting equitable fiscal policies and social safety net reform. / √ / Competitiveness and Integration. This could include such topics as logistics, behind-the-border regulatory convergence, trade strategy and negotiations, planning and facilitation of cross-border infrastructure, and promoting and facilitating infrastructure projects, particularly in the areas of urban infrastructure, transport, trade facilitation and private sector development. / √

B.  STRATEGIC CONTEXT

10.  Country and Sector Issues

Following the 25th of January 2011 revolution Egypt is in a transitional phase confronted with major economic and societal challenges. Economically, the country’s GDP growth rate reached 2.2 % for the fiscal year 2011-2012 compared to 5.4% before the revolution. Unemployment rose from 9.4% pre-revolution to 13% with some3.5 million unemployed persons, of whom a large majority are youth.Dividends of the revolution have not been felt, leaving citizens highly frustrated and yearning for stability, prosperity and social justice.
Driven by the private sector and accounting for almost 20% of the GDP and 23% of employment, the industrial sector is critical for Egypt’s economic growth and for employment generation. Traditionally focused on heavy and labor-intensive sub-sectors such as iron, steel, petroleum, spinning and weaving, the industrial sector has evolved and diversified over the years to include agro-processing, ready-made garments and leather manufacturing, paints and tiles, furniture, automotive feeding industries, etc. The government has supported the industrial sector through various initiatives including the creation of industrial zones, the establishment of dedicated specialized councils representing the private sector and advocating for their demands, facilitation of private public partnerships and provision of support services through specialized entities such as the Industrial Council for Technology and Innovation and its affiliated technology and innovation centers.
Given that SMEs make up 99% of the non-agriculture private sector, they are crucial stakeholders in the industrial sector both in terms of firms operating in the sector as well as feeding industries for the larger private and public sector firms. According to a 2012 census conducted by the Egyptian Banking Institute, 51% of SMEs operate in the manufacturing sector, largely in the food and beverage sub-sector followed by the textile sub-sector. It is estimated that SMEs account for a substantial percentage of GDP and for 75% of employment.
While SMEs are positioned as a key driver for economic growth and job creation, they face a number of financial and non-financial challenges. Although access to finance for SMEs is being addressed at various levels and through a number of initiatives, non-financial challenges remain largely unresolved. These include areas such as registration and obtaining permits, entrepreneurship skills, technical knowledge and training, marketing and distribution, quality considerations and certification, integration in the supply value-chain and access to accurate, timely information on markets and their needs.
There is untapped potential for entrepreneurship and skills development in the area of management and utilization of industrial and hazardous wastes, which has high potential for business to business transactions, resource efficiency and climate change mitigation. International experience has proven that re-used and recycled industrial waste is a valuable source for energy generation, employment creation, and climate change mitigation if well utilized and managed. While estimates for energy generation and climate change mitigation are context-specific, global estimates indicate that recycling-based manufacturing generates 25 jobs for each 10,000 tons of recycled solid waste per year. In 6 years of operations, the National Industrial Symbiosis project in the UK has created and safeguarded 8,770 jobs. In Egypt, there is substantial potential for the creation of small businesses in the untapped area of waste management, particularly given the volume and composition of waste generated annually, which is as follows: 21 million tons of municipal solid waste, 23 million tons of agricultural waste, 6.2 million tons of industrial waste, 0.2 million tons of hazardous waste and 28,500 tons of medical waste. Industrial waste consists of 12.5% of all waste generated. On the assumption that 50% of industrial solid waste can be recycled, 8000 direct jobs can be generated annually, in addition to a multitude of indirect jobs, while ensuring growth of business-to-business, resource efficiency and reduction of Greenhouse Gas (GHG). As such, the proposed industrial waste exchange system (IWEX) will have a transformational impact as it will contribute in positioning waste management as a new untapped niche market for the creation of innovative small businesses.
Currently, industrial waste, considered non-valuable, is being disposed of through landfills and illegal dumping, generating GHG emissions that contribute to climate change and have a negative impact on the health of Egyptian citizens. Methane emissions for landfills represent the largest source of GHG emissions in the waste sector. Waste prevention and resource recovery through re-usage/recycling are key activities for climate change mitigation. In addition, waste mismanagement coupled with pollution are recognized as key factors towards the increase in the burden of disease over the last decade and the prevalence of increased malnutrition and stunting of the population. The impact on the health of citizens has thus been direly affected, resulting in increasing health expenditures and a degradation of the quality of life of citizens.
Contrary to agricultural and municipal waste, solid waste from the industrial sector is simpler to manage particularly given that most of the solid waste emanates from some 28,000 facilities nationwide, a majority of which are concentrated in industrial zones. The Greater Cairo region alone hosts almost 50% of all industrial activities, and includes areas such as the 10th of Ramadan industrial zone where 2500 industrial establishments operate in a variety of sectors known to be intensive generators of industrial waste, such as food processing, chemical industries, building materials, textiles and engineering industries.
The proposed project builds on the ability to develop entrepreneurship and create green jobs through the establishment of a sustainable industrial waste exchange (IWEX) system that links waste generators to waste users and recyclers to enhance resource efficiency across the different industrial sectors. The project will also contribute to reducing the adverse environmental impacts from the bad disposal of industrial and hazardous wastes, thereby reducing GHG emissions as well as contributing to the reduction of health related expenditures.

11.  Alignment with Transition Fund Objective

The proposed project is aligned with the Transition Fund Objective as it aims to: (i)foster sustainable and inclusive economic growth through the establishment of an integrated and sustainable industrial waste exchange system in Egypt that connects producers, potential users and recyclers of industrial waste across different industries. This waste exchange system will allow for the creation of new green jobs particularly at the level of small and medium enterprises. (ii) improve citizens’ lives through the minimization of the adverse environmental impact of industrial waste on the health of people; (iii) contribute to strengthened governance of public institutions through building capacities of key stakeholders responsible for developing, implementing, improving and regulating the waste exchange system and disseminating information towards the creation of a green innovative entrepreneurship hub in Egypt with easy access to all entrepreneurs.
The project is aligned with the four pillars of the Transition Fund as follows:
i.  Investing in Sustainable Growth: A sustainable industrial waste exchange system will promote recycling and improved waste management thereby tapping into new opportunities and contributing significantly to economic growth in an environmental-friendly and sustainable manner. Growth between and amongst businesses will be enhanced through a symbiotic relationship and will be strengthened through innovation and technology transfer as well as an enhanced regulatory framework and the adoption of new processes.
ii. Inclusive Development and Job Creation: Through the promotion and development of a functioning exchange market for industrial waste in Egypt, the project will disseminate knowledge on new opportunities and businesses, which will lead to job creation particularly for the youth. The project will also include a support services component to assist entrepreneurs in exploring new green business opportunities.
iii.  Competitiveness and Integration: A well operated industrial waste exchange system becomes a symbiotic program developing relationships between waste producers, potential users and recyclers, thereby promoting business-to-business relationships, and contributing to enhanced efficiency and greater competitiveness.
iv.  Enhancing Economic Governance: The project includes a substantial policy component which will seek to enhance economic governance issues through evidence based research, towards improved industrial waste management. The research and mapping to be conducted will allow for the creation of an inventory and traceability system for industrial waste. Management of the system will be based on improved regulatory oversight, transparency and streamlined governance structures.

12.  Alignment with Country’s National Strategy

The proposed project is closely aligned with Egypt's National Development Plan and the sectorial strategy elaborated in the following strategic documents:
1. Egypt's Industrial Development Strategy (2006-2025) that positions the industrial sector as an engine of growth, employment creation, and export promotion. The proposed project will contribute to these outcomes through the enhancement of resource efficiency across different industries, the improvement of industrial productivity and through increasing the competitiveness of Egyptian products in global markets, while promoting the creation of new innovative SMEs, and job opportunities.
2. The 8th Egyptian Competitiveness Report (issued in 2012)which underlines waste management as a crucial element of Egypt's sustainable and green economy, and a main strategic component of sustainable and green growth.
3. The National Strategy For Cleaner Production in Egyptian Industry (issued in 2003–updated 2009)which highlights the need for reducing industry-generated discharges to the environment due to the considerable environmental impacts of the industrial sector.
4. "Egypt, The Way Ahead", September 2011, which included amongst its prioritized areas for collaboration under the Deauville Partnership, policies geared towards strong and sustainable growth that promotes job creation and macroeconomic stability; human and institutional development, including strong legal frameworks and good governance; technological transfers including in the field of green economy; and SMEs development.
The project is also aligned with the recommendations of the following regional reports issued by international donors and organizations:
·  The AfDB’s Urban Development Strategy, 2011, which calls for appropriate reforms of the legal and regulatory frameworks particularly for disposal of waste and industrial by-products as well as knowledge generation and capacity building; and the AfDB’s Policy on Environment, 2004, whose main goal is the improvement of the overall quality of life of the people of Africa by supporting an environmentally sustainable development path.
·  The EU Survey on Sustainable Enterprise Development in the Mediterranean Region,2012, which highlights the importance of encouraging industrial enterprises’ broader uptake of new clean production and efficient waste disposal techniques and calls for increased attention to fostering innovation for sustainable enterprise development.
·  The OECD’s Good Practice Guidance Note, issued July 2012, promoting innovation for anti-poverty green growth through innovation as a result of technology transfer, institutional organization or adoption of processes.
·  The Euro-Mediterranean Charter for Enterprise–particularly Dimension 11 on Sustainable Enterprise Development endorsed by the Euro-Mediterranean Ministers of Industry during the 8th Euro-Med Ministerial Meeting on Industry, May 2011 in Malta;
·  The Small and Medium Enterprises Strategy developed jointly by the GoE and Canadian International Development Agency (CIDA), which calls for entrepreneurship development.
·  The Guidelines on Waste Management developed by the Egyptian Environmental Affairs Agency (EEAA) with the support of USAID, which provides key guidance to the different stakeholders from the public and private sectors regarding hazardous wastes collection, transportation, handling, recycling, recovery and treatment.
·  GIZ Study on Green Growth which has identified waste management and recycling as important drivers for green job creation in Egypt.

C.  PROJECT DESCRIPTION