World Bank approved a $400 million development financing agreement to improve the performance of the logistics and transportation sectors in Egypt and to support the shift towards low-carbon transportation along the Greater Cairo Area (GCA) railway corridor.

The Cairo Alexandria trade logistics development project will implement a railway bypass to the congested GCA area. The bypass will provide freight trains between the Alexandria Sea Port and the newly constructed 6th of October Dry Port, with an alternative route to the west of Greater Cairo.

World Bank estimates the project will reduce greenhouse gas emissions by 965,000 tons over 30 years as the transportation sector “is the second largest contributor to Egypt’s greenhouse gas (GHG) emissions after energy contributing approximately 19 percent,” according to the Bank’s statement.

The railway bypass will also allow 15 container trains per day by 2030, and as demand increases, 50 trains by 2060 to this dry port.

The project also will also support the advancement of the Egyptian government’s reform effort to improve the railway sector’s performance and promote private sector participation by creating “Egypt’s Infrastructure Access Charging” regime. The charging regime is similar to tolls on roads or airport fees. Private investors can operate their trains on the tracks of the Egypt National Railways Authority for a fee and this will boost the authority’s finances according to World Bank.

“This agreement will support the Government of Egypt’s progress toward clean, smart transportation to reduce emissions, all within the framework of the green economy transition, while also increasing private sector participation in development efforts,” H.E. Rania A. Al-Mashat, Minister of International Cooperation, said.

The project comes in line with Egypt’s latest efforts to integrate into global value chains and become a regional trading hub. The predicted reduction in greenhouse gas emissions contributes to Egypt’s 2050 Climate Change plan and its recent sustainability efforts in the lead-up to hosting COP27 this November.