Egypt's Central Bank Trains 11 African Central Banks to Stress-Test Climate Risk

The Central Bank of Egypt has hosted a five-day training programme on climate-risk stress testing for central banks across the Common Market for Eastern and Southern Africa, known as COMESA. According to Daily News Egypt, 25 representatives from 11 member-state central banks took part, together with a delegation from the COMESA Monetary Institute.

The sessions were held at the headquarters of the Egyptian Banking Institute in Cairo and focused on how climate-related risks can be built into stress tests at both the micro and macro level. Participants worked through discussions, practical examples and exchanges of experience, using standard models. The stress-testing applications covered credit risk, liquidity risk, climate-related risk and interbank contagion, which is the way a shock at one lender can spread through the wider banking system.

The lecturers came from three parts of the Central Bank of Egypt: the Macroprudential Sector, the Offsite Supervision Sector and the Sustainability Department of Financial Inclusion. The programme combined theory with practice, and participants compared approaches, shared expertise and discussed the challenges that climate risks pose to the banking sector and to financial stability.

The training is part of the Central Bank of Egypt's continuing cooperation with the COMESA Monetary Institute, which aims to strengthen integration and knowledge-sharing among African central banks. By the end of the week, participants had drafted proposals and recommendations on how including climate-related risks in stress tests could affect the operations of COMESA central banks.

Those recommendations are not the end of the process. They are scheduled for discussion by central bank governors at their annual meeting in Malawi in November 2026, which is where the practical question will be decided: whether and how the region's supervisors take the approach forward.

Stress testing is one of the main tools supervisors use to ask whether banks could withstand severe but plausible shocks. Extending it to climate risk means asking what happens to loan books, liquidity and the links between lenders when physical hazards or the transition away from fossil fuels change the value of assets and the ability of borrowers to repay. For economies that depend heavily on agriculture, energy and trade, those questions are not abstract.

What stands out in this programme is its regional design. Rather than each central bank building its own method in isolation, a group of institutions from eleven countries has been trained on a shared set of models and has produced joint proposals. That can make it easier to compare results, align supervisory expectations and share scarce technical expertise.

The report does not say how many of the participating central banks already run climate stress tests, nor does it set out timelines or binding requirements. Those details will depend on what the governors decide in Malawi. For now, the training shows climate risk being treated as a financial stability issue by the institutions responsible for keeping banking systems sound, and it shows an African central bank taking a convening role in building that capability across the region.

Why it matters

Climate risk is financial risk, and central banks are the institutions that decide whether banks are prepared for it. By training supervisors from 11 countries on shared stress-testing methods, this programme moves climate from the sustainability report to the supervisory toolkit, which is where it shapes lending, capital and resilience.