COP 28 Insight: Bahaa Alieldean Legal Insights on Climate Finance
With Suzan Taha
In the ever-evolving landscape of climate finance, Dr. Bahaa Alieldean, Senior & Managing Partner at ALC- Alieldean Weshahi & Partners, shares his perspectives on navigating the legal dimensions of climate-resilient economies.
Join LegalcommunityMENA in this exclusive interview as Dr. Alieldean offers unique insights into the role of legal frameworks in achieving sustainability goals as well as shed light on the challenges and opportunities within the climate finance architecture, especially in the context of COP 28.
How can the legal community contribute to the success of initiatives like the Country Climate and Development Platforms (CCDPs) in fostering low-emission and resilient pathways?
Lawyers can help facilitate the CCDP initiative by providing legal advice and support to the countries that participate, as well as to the World Bank Group and other partners that are involved in the design and delivery of the CCDPs.
I think it’s important to remember, though, that for a country like Egypt, there are four “groups” of people (in both the legal and business communities) when it comes to their focus on climate.
A very small number are “true believers” who understand CCDPs, who get the issues, speak the jargon, and are all-in from a belief point of view.
A slightly larger group are newcomers to climate, and they’re primarily interested in seeing how they can “do well while doing good.” How can we generate a fee while helping a client capture a climate- or sustainability-linked opportunity?
A still larger group of people simply do not care about climate. Regardless of their industry — professional services to polluting industries (up to a certain size and sophistication) — this is an issue of which they’re aware, and they simply don’t care.
And the final, largest group is one that hasn’t made up its mind about how to tackle climate yet because it simply isn’t on their radar. They’re too busy growing their business, responding to regulatory change, coping with the challenges of doing business in a high-inflation environment with a shortage of foreign currency.
From your perspective, how do coordinated efforts between Multilateral Development Banks (MDBs) enhance strategic and policy advice, as well as technical and financial resource mobilization for countries pursuing climate-resilient economic transformations?
One of the benefits of coordinated efforts between Multilateral Development Banks (MDBs) is that they leverage their collective expertise, experience, and networks to provide tailored and integrated solutions for countries facing complex and interrelated challenges of climate change and development.
True, these solutions can include helping align policies, standards, and instruments to support countries in implementing their nationally determined contributions and long-term strategies under the Paris Agreement.
But ultimately, speaking as someone who is hands-on with corporate clients in everything from energy to one of Africa’s largest urban developers: The best thing that MDBs can do to make a difference is to provide subsidized funding to corporations for both adaptation and mitigation — and very tightly link the availability of that funding to individual corporate borrowers making progress on climate goals.
And this doesn’t have to be one-to-one lending for megaprojects. Multilaterals as well as development finance institutions (DFIs) have done fantastic work making pools of capital available to commercial banks for on-lending to qualified borrowers.
In Egypt and North Africa in particular, I think it’s important that readers understand how key DFIs such as the European Bank for Reconstruction and Development, Afreximbank, the European Investment Bank, and others have been — and continue to be. The IFC is also doing a lot. They’ve all stepped up where many MDBs are still talking.
In your extensive experience, how have you seen the role of capital markets evolve in supporting climate finance, especially in the context of low-carbon and resilient economic transitions?
Players in Egypt’s capital markets sense an opportunity, and this is helped along by smart policy from the Financial Regulatory Authority and Central Bank of Egypt, among others.
Green bonds (both standard and shariah-compliant) are now a feature of the landscape, if still in their infancy. Sustainability-linked bonds are not as big here yet as they are, for example, in the UAE, but they’re going to get there.
Capital markets can also play a key role in mobilizing private sector participation and enhancing transparency and accountability of corporations — the Egyptian Exchange now requires companies to report on environmental, social and governance (ESG) issues, and the requirements are becoming stricter and more expansive on a planned calendar over the coming years.
What challenges do countries face in mobilizing public and private financing for deep transformations in key economic sectors, and how can legal professionals address these challenges effectively?
Look, lawyers have the skills to address just about any issue our client brings in the door — that’s the nature of the profession, right? But there’s nothing we can do at the country level as corporate practitioners. That’s the purview of policy professionals in government and how they line up funding from DFIs, MDBs, etc, at the national level.
What we can do — and what we are doing, as my firm did on Africa’s largest non-recourse financing project, a “green” refinery with an investment ticket of more than USD 4 bn — is help our clients choose which DFI or MDB or commercial lender they’re working with, help them understand the complexities, and then ensure they close a transaction that is win-win for all parties.
Could you share insights into your experience as counsel for major Egyptian Banks and how legal considerations play a crucial role in multi-million dollar financial transactions, particularly those aligned with climate goals?
At my level, it is all about helping our clients understand the landscape and the complexities. Although there is a growing number of professionals conversant in climate and sustainability, this is a new issue for many; whether I’m working with a bank to onboard funds from a DFI, a bank looking to disburse funds to a borrower, or whether I’m representing the borrower looking to work with a bank or DFI.
Certainly, though, Egyptian banks are significantly more sophisticated on this front than are most corporate borrowers. They have paid attention to the issue for a longer time, prompted by both their regulator and by changing international trends and requirements.
With over 20 years of experience, how has the legal landscape evolved concerning climate-related matters, and what changes do you anticipate in the coming years?
We’ve seen a veritable explosion of new legislation and regulation. What we’re yet to see is much of that regulation to be challenged in court or through arbitration — I think that’s where things will become particularly interesting.
Broadly speaking, though, Egyptian agencies — from financial regulators to energy regulators — have been drafting regulation, legislation, and policy with impressive sophistication. I think what we’d all like to see is faster implementation. related matters, such as litigation, arbitration, mediation, negotiation, and advocacy.
About Dr. Bahaa Alieldean
Dr. Bahaa Alieldean is the Senior & Managing Partner at ALC- Alieldean Weshahi & Partners, specializing in capital market and banking transactions. With over two decades of experience as a corporate lawyer, he has served as a legal advisor to numerous national and multinational firms in Egypt.
Dr. Alieldean has played a pivotal role as Legal Counsel for major Egyptian Banks and leading companies, handling complex multi-million dollar financial transactions. In the past decade, he has served as Legal Counsel for the issuer in over 30 securitizations within the Egyptian market.
Beyond his practice, Dr. Alieldean has contributed to academia, teaching commercial law at Monoufiya University in Egypt. Holding a Ph.D. in business law from King’s College London, he has also published multiple academic papers on commercial and business law.
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