<h3>Introduction</h3>
Every community is susceptible to climate hazards. However, resilient communities have adequate infrastructure and technology, making them more prepared to respond to and recover from climate disasters (Ashmawy, 2021). Egypt is highly vulnerable to droughts, water scarcity, rising sea levels, and other adverse climate risks, which pose an imminent risk to its agricultural, tourism, and coastal communities (IMF, 2022). The vulnerability and exposure to climate risks drive the governments and non-state actors to build resilience across these prioritised sectors. Building resilience has become not just a nice-to-have, but rather a necessity to avoid economic loss. This article presents businesses&rsquo; and other non-state actors' role in resilience building and untapped opportunities across value chains. It sheds light on the resilience-building process to enable communities to cope and recover from the hazards while anticipating and adapting to future climate risks. The article also attempts to review the current status of climate resilience measures already in place in Egypt and the further plans to prepare and respond to climate risks, and identifies potential policy interventions needed to facilitate the mobilisation of climate resilience financing from the private sector, which is crucial for building a climate-resilient future.&nbsp;
<h3>Introduction</h3>
The Intergovernmental Panel on Climate Change (IPCC, 2022) defines resilience as:
The capacity of interconnected social, economic and ecological systems to cope with a hazardous event, trend or disturbance, responding or reorganising in ways that maintain their essential function, identity and structure. Resilience is a positive attribute when it maintains capacity for adaptation, learning and/or transformation (Arctic Council 2016).
Egypt is one of the countries critically vulnerable to climate change, which is causing adverse impacts affecting its water security and causing a rise in its sea levels. The latter&nbsp; will lead to the sinking of around 1% of its land area, among other hazards. This poses serious direct and indirect risks to its agricultural and tourism sectors and coastal areas, especially in the Nile Delta, North Coast and Sinai, as well as&nbsp; the Egyptian socio-economic system at large (IMF, 2022; Fahim et al., 2013; El-Raey, 2010; Egypt NDC, 2022).&nbsp;
This article briefly discusses some of the key interventions that the Egyptian government is considering to build climate resilience across the most vulnerable sectors and communities. It then proceeds to explain how building climate resilience has now become a business opportunity lucrative for the private sector. Despite the foregoing business opportunity, barriers to private sector investment exist; on which the article&nbsp; sheds light, and suggests potential policy options to address them. Finally, the article highlights the role of other Non-State Actors (NSA) as key partners in supporting and implementing climate resilience projects in Egypt.&nbsp;
<h3>The Status Quo</h3>
Egypt&rsquo;s updated Nationally Determined Contributions (Egypt&rsquo;s NDC, 2022) provides an overview of the adaptation and resilience projects that have been implemented since 2015 across the agricultural and water security sectors, as well as building resilience in coastal areas in the Nile delta and North Coast cities.&nbsp;
Egypt&rsquo;s NDC further lists the planned adaptation and mitigation goals and projects to be implemented by 2030. This includes climate and desalination resilient crops, resilient irrigation resources, building further resilience across the Nile delta and Mediterranean coastal cities, transforming touristic resorts and hotels into resilient buildings using green architecture, increasing national protectorate areas to protect biodiversity, establishing early warning systems and implementing resilient infrastructure in areas that are most impacted by climate hazards (ibid).&nbsp;
However, Egypt&rsquo;s NDC has provided an estimate of 50 billion US Dollars as a financing prerequisite that needs to be secured in due time to implement these projects by 2030 (ibid). Given the significant size of this financial requirement and the very short timeframe to raise it, a key source of financing would be the private sector, in addition to foreign funds from governments and organisations of the Global North.&nbsp;
<h3>Impact of Climate Change on the Private Sector</h3>
A recent report by the Carbon Disclosure Project (CDP, 2021) stated that around 1.26 trillion US Dollars of revenue could be at risk globally within the next five years due to changing climate, hazards, deforestation, and water insecurity. Hence, achieving Net-Zero targets in private sector companies&rsquo; operations has become insufficient on its own to mitigate the business risks posed by adverse climate events across the corporate value chains (Biagini and Miller, 2013; Ceres, 2012).&nbsp;
Accordingly, financing climate resilience building should now become a top priority for the private sector in order to address these significant risks, instead of considering climate resilience projects a mere public good that the government should provide. However, this is dependent on the government&rsquo;s timely support to help overcome the barriers to private sector investment in climate resilience, hence making it an attractive business opportunity
<h3>Existing Barriers to Finance Mobilisation from the Private Sector</h3>
Mobilising financial and technical resources from the private sector has become a major requirement to build climate resilience, especially in the countries of the Global South, including Egypt. One of the main barriers to private sector financing climate adaptation and resilience projects is their positive externality nature, or the spillover effect, where the benefits of such projects cannot be internalised by the private financing entity(s), and these benefits are also utilised by non-financing entities as free-riders; creating a market failure (Biagini and Miller, 2013; Parsad et al., 2022).&nbsp;
A second barrier is the uncertainty concerning climate risks, given the climate data gaps and asymmetries and lack of weather forecast information availability (Biagini and Miller, 2013; Parsad et al., 2022; Bellon and Massetti, 2022; Stiglitz, 2019). Moreover, the fact that adaptation and resilience projects require significant upfront capital investment while the Return on Investment (RoI) is long-term makes it an unattractive investment for the private sector (Biagini and Miller, 2013; Parsad et al., 2022; Krogstrup and Oman, 2019; Hallegatte et al., 2020).
Another issue is that since resilience systems usually depend on networks, there is a lack of motivation for private sector actors to invest in a specific area without being assured that other actors in the network will also invest in their corresponding areas, and accordingly, an individual investor&rsquo;s RoI is dependent on the other actors within the network (Feng and Li, 2021; Parsad et al., 2022).&nbsp;
<h3>Proposed Policy Options</h3>
A proposed policy intervention to help internalise the public benefits of financing climate resilience in Egypt is mandating carbon and sustainability disclosures in private sector entities through regulation, as well as creating common standards and taxonomies to maintain transparency (Parsad et al., 2022). This will require investing in a robust governance system to ensure the implementation and monitoring of such disclosures.&nbsp;
Sharing existing climate risks and deployment of early warning systems might help address private sector investors' information asymmetry and data gaps (ibid). However, further data needs to be produced, which requires public financing of additional Research and Development (R&amp;D) (ibid).&nbsp;&nbsp;
Blended public-private financing of climate resilience projects would help safeguard the private sector&rsquo;s investments and accordingly mitigate the investment risks described above, as well as internalise the social benefits of the investments&nbsp;(Parsad et al., 2022; Griffith-Jones et al., 2020; Ketterer and Powell 2018). Green bonds and Green Asset-Backed Securities (ABS) are examples of public loans and facilities granted to private sector investors in return for investing in climate adaptation and resilience projects, in addition to the conventional tax reliefs, subsidies and concession agreements, which also help mitigate the investment risks for the private sector (Parsad et al., 2022). These tools require public expenditure, which in turn requires further support from governments and organisations of the Global North, such as the International Monetary Fund (IMF) and the World Bank.&nbsp;
Finally, another role for the government would be the roadmap creation and coordination among different actors within the same network to ensure synergy is reached, enabling investors to internalise the social benefits of their investments&nbsp; (Parsad et al., 2022; McKinsey Global Institute, 2022).
<h3>NGOs, CSOs and Grassroots</h3>
Non-Governmental Organisations (NGOs), Civil Society Organisations (CSOs) and Grassroot Movements play an instrumental role in sharing the voices of the communities that are most vulnerable to climate risks and hazards, building momentum towards the pressing resilience priorities, implementing the climate resilience projects once financing is secured and monitoring and evaluating the status post-implementation. These organisations and movements are indispensable partners in mobilising financial and technical resources for climate resilience building.&nbsp;
<h3>Conclusion</h3>
Egypt is highly vulnerable to climate risks and hazards, and it urgently requires financial and technical support to build the needed&nbsp; resilience to prepare, respond to and recover from adverse climate events, and protect the lands, houses and jobs of the impacted communities.&nbsp;
A significant part of the required financing could be secured from the private sector, provided the barriers to such investments are addressed. Said could be addressed through policy solutions that, with the exception of concession agreements, demand public expenditure, which in turn requires financial support from the Global North. COP27 negotiations are expected to have a major role in addressing the long-promised funding from the countries of the Global North to help overcome these barriers through grants and debt relief schemes, as well as the programs provided by national and international organisations such as the IMF, the World Bank, and other development and multilateral banks and institutions.&nbsp;
<hr>
<h2>Bibliography&nbsp;</h2>
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