The Banking Executive Magzine - July 2025 Issue

FRA FRA Releases 2024 SUSTAINABILITY REPORT HIGHLIGHTING LANDMARK PROGRESS IN GREEN FINANCE The Financial Regulatory Authority (FRA), chaired by Mohamed Farid, has released its 2024 Annual Sustain- ability Report, providing a compre- hensive overview of its strategic efforts to integrate sustainability into Egypt’s non-banking financial sector. The report highlights key milestones that underscore the FRA’s leadership in aligning regulatory frameworks with national climate objectives and global sustainability standards. Among the most notable achieve- ments in 2024 was the finalisation and official launch of the regulatory framework for Egypt’s voluntary car- bon market. The launch event, held in the presence of six ministers and leading stakeholders, marked a piv- otal moment in the country’s shift toward a low-emission economy. This development reflects the FRA’s ongoing commitment to fostering a balanced and sustainable environ- mental and financial system. The report details the FRA’s contin- ued progress in embedding environ- mental, social, and economic considerations into its regulatory agenda, in alignment with Egypt’s Vi- sion 2030. It also highlights efforts to expand the promotion of the volun- tary carbon market on both domestic and international fronts, strengthen the availability and use of climate-re- lated financial instruments, and in- crease the issuance of carbon reduction tools. As a result of these efforts, projects from Egypt, Oman, Nepal, India, and Bangladesh have been successfully registered within the new framework. An important feature of this year’s re- port is the inclusion of the FRA’s car- bon footprint assessment for 2024, conducted by a nationally accredited body listed in the Authority’s registry of verification and validation entities. This makes the FRA the first regula- tory body in Egypt to assess and pub- licly report its institutional carbon footprint—a significant step toward operational transparency and envi- ronmental accountability. The report also outlines the role of verification and validation entities registered with the FRA. These enti- ties are authorised to assess and cer- tify environmental projects aimed at reducing carbon emissions by re- viewing project data, evaluating technologies used, and verifying estimated emission reductions. Their work enables investors, institutions, and the public to assess the credibil- ity and compliance of carbon reduc- tion projects. As of 2024, six domestic and international entities are officially registered under the FRA’s regulatory framework. These efforts are rooted in Egypt’s commitment to structured carbon market development, as first an- nounced at COP27. The FRA’s work throughout 2024 resulted in the is- suance of nine key regulatory deci- sions that established the regional framework for voluntary carbon mar- kets. This led to the creation of five national carbon registries and the op- erationalisation of six accredited ver- ification and validation entities, collectively supporting the registra- tion of 34 carbon reduction projects. These projects, spanning Egypt and several other countries, have already accounted for the processing of more than 170,000 tonnes of carbon emis- sions. Further regulatory advancements in- clude the FRA’s successful proposal to amend provisions of the executive regulations of Capital Market Law No. 95 of 1992, leading to the is- suance of Prime Ministerial Decree No. 4664 of 2022. This amendment formally classifies carbon reduction certificates as financial instruments, laying the legal groundwork for their trading within Egypt’s capital mar- kets. Following this, the FRA established Egypt’s first Oversight and Supervi- sory Committee for Carbon Reduc- tion Units, with clearly defined responsibilities for market gover- nance. In addition, the Authority is- sued regulatory guidelines for the registration of verification and vali- dation entities, introduced rules gov- erning the listing and delisting of carbon certificates on local ex- changes, and approved operational standards for voluntary carbon reg- istries. These registries serve as elec- tronic platforms to issue, record, and track the transfer of ownership for carbon certificates generated by ap- proved projects. The FRA also en- dorsed trading and settlement mechanisms for these certificates on the Egyptian Exchange, completing the infrastructure needed for a func- tioning voluntary carbon market. Through these integrated efforts, the FRA continues to drive the transition to a green economy, positioning Egypt as a regional leader in sustain- able finance and climate-aligned market development. ISSUE 199 JULY 2025 the BANKING EXECUTIVE 41