The Commercial International Bank (CIB) – Egypt has opened the door for subscription for the first green bond issuance in the Egyptian market, after obtaining the initial approval from the Financial Regulatory Authority (FRA).
The bank explained, in a statement to the Egyptian Exchange on Wednesday, that the value of the private placement amounts to $100m in the form of five-year bonds with a fixed and non-refundable return.
CIB pointed out that the International Finance Corporation (IFC) confirmed its commitment to subscribing to the entire value of the issuance.
He added that the proceeds will be used to finance a portfolio of green loans offered by the Commercial International Bank to its clients of institutions and small and medium enterprises, in addition to financing capital expenditures for the bank’s green buildings, at a rate of up to 20% of the total proceeds. The proceeds of these bonds will be directed to a variety of climate change mitigation initiatives, including green building construction, energy efficiency, use of renewable energy sources, water and wastewater management, and clean transportation.
The said that the issuance of this type of bond is an integral part of CIB’s mission to support customers who are looking to make more sustainable investment options, and will contribute to consolidating the positive impact on the environment in the fabric of its credit policy and decision-making regarding lending and investment decisions.
The bank announced that it will launch the Green Bond Framework this week, which defines the criteria for using the issuance proceeds, the conditions for obtaining financing, the selection criteria for projects to be financed through loans granted to customers, and managing the issuance proceeds in addition to preparing reports and evaluating the effects resulting from these financings.
It explained that the Moody’s International Company, Viggio Iris, has revised this framework, which is in line with the principles of the green bonds of the International Capital Market Association issued in 2018. CIB will play the role of the offering manager, provided that Zulficar Law Firm will act as the legal advisor and Deloitte will play the role of reviewer.
