Shaping a Sustainable Future in MENA Through Strategic Financing

Challenge

By 2040, energy demand in the Middle East and North Africa (MENA) region is projected to increase by 50%. Driven by climate change, rising temperatures, ongoing population and economic growth, rapid urbanization, and elevated living standards, this has led to a significant increase in cooling demand and a dramatic rise in electricity consumption. The resulting greenhouse gas emissions are further exacerbated by the use of synthetic refrigerants with high ozone-depleting and global warming potentials, which is still prevalent in many air conditioners and refrigerators that are still being used, despite the availability of sustainable alternatives. To break this cycle and enhance climate resilience, the MENA region must scale up sustainable cooling solutions, reduce cooling demand in buildings, and adopt natural refrigerants. Securing adequate financing is essential to overcoming these challenges, ensuring solutions can be implemented and expanded across the region.

Through the Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV) and the Federal Ministry for Economic Affairs and Climate Action (BMWK), the German government is proactively addressing these and other climate change mitigation topics through their joint International Climate Initiative (IKI).

Solution

Guidehouse is spearheading two projects in collaboration with IKI, focused on infrastructure, efficient energy use, and sustainable cooling with a strong emphasis on financing. BUILD_ME, which aims to accelerate zero-emission building sector ambitions in the MENA region, is concentrated on unlocking financial resources for low-energy buildings and efficient cooling appliances. In July 2024, BUILD_ME’s innovative Building Energy Performance (BEP) Tool and the Energy Performance Certificate (EPC) were selected to be included in the European Bank for Reconstruction and Development’s (EBRD) “Technical Guide for the Green Economy Transition” as an approved certification scheme. With the ability to use online tools as an approval process of the financing scheme, this will facilitate the assessment of projects for direct lending by the EBRD and intermediated financing through the Green Economy Financing Facility and similar green credit lines in Egypt and Jordan.

Similarly, helping financial institutions leverage existing models or develop new ones to support the cooling market and improve access to finance for sustainable cooling technologies has become a critical focus in the Cool Up programme. The programme builds on the emerging sustainable banking sectors in Cool Up’s partner countries—Egypt, Jordan, Lebanon, and Türkiye—incorporating sustainable cooling solutions into the technology portfolios of national and regional banks through targeted training for financial institutions. These trainings enhance participants’ knowledge of sustainable cooling practices by highlighting the link between finance and environmental strategies. This effort contributes to Cool Up’s broader goals of fostering sustainable cooling.

Impact

BUILD_ME and Cool Up are not only shaping the future of the built environment but also empowering the finance sector to drive industry transformation with a strong focus on financing activities. The BEP Tool has equipped building developers, financiers, and energy auditing professionals with the knowledge and capabilities to access new financial resources and drive sustainable change in the building sector, with EPC expert and auditor trainings conducted for more than 140 leaders across BUILD_ME partner countries. Additionally, Cool Up has launched its capacity-building efforts for the financial sector by providing training for more than 40 financial stakeholders on sustainable cooling technologies, the role of natural refrigerants, and strategies for financing these technologies. Collectively, both programmes aim to reduce emissions by 10,000 tCO2eq and empower over 900 industry, finance, and policy stakeholders by their culmination. By integrating financial mechanisms and fostering partnerships with key international and local banks, these initiatives ensure that sustainable progress is being made in the MENA region for communities and future generations.