Financing the future: green investment, policy innovation and sustainable energy transitions in Egypt and Jordan

Purpose This paper discusses the potential to drive renewable energy penetration in Egypt and Jordan through green finance. As sustainability becomes an international priority, this paper explains regulatory systems, finance tools and private sector participation in influencing green investments in these emerging economies. Design/methodology/approach This article uses comparative analytical methodology to examine green finance take-up in Egypt and Jordan. Quantitative methods used in this article include dynamic panel data (DPD) and difference-in-differences (DiD) estimations to discuss trends in investments, policy effectiveness and finance accessibility by small to medium-sized enterprises (SMEs). Secondary sources in international finance publications and renewable energy investments inform this work. Findings Renewable energy projects have been significantly shaped by green finance instruments, such as international lending, public–private partnerships (PPPs) and sovereign green bonds. Egypt has stability-assuring state-led system that discourages private sector engagement, while Jordan has a mixed system that instills competition while depending significantly upon foreign investments. Regulator complexity and limited accessibility to green finance by SMEs remain among the most longstanding issues. Islamic finance is also featured in this work to possess vast potential in expanding green investments. Practical implications We require a balance between private sector innovation and state-financed stability. Regulators ought to enhance regulatory transparency, reduce finance accessibility complexity and stimulate private finance by facilitating sharing-risk schemes. Financial institutions ought to diversify finance schemes to better incorporate SMEs. Originality/value This work provides a comparative perspective on green finance in Egypt and Jordan regarding regulatory effectiveness, private sector engagement and finance accessibility to support sustainable development.