Egypt has achieved a milestone by becoming the first country in the Middle East and Africa to issue sustainable panda bonds in the Chinese financial market. The bonds are worth about CHY 3.5bn, or $500m, and will be used to finance projects that support sustainable development goals.
According to Minister of Finance Mohamed Maait, the bonds have a low-interest rate of 3.5% annually for three years, which is more competitive than the rates of international dollar bond issues, especially amid global economic challenges.
He added that the bonds are backed by a credit guarantee from international development banks, such as the Asian Infrastructure Investment Bank and the African Development Bank, which have a high credit rating. He said that the Ministry worked with the guarantors to complete all the preparatory procedures for issuing the panda bonds in the Chinese financial market, which is the second largest in the world in terms of size. The aim is to diversify the sources of financing and enter new global markets.
Maait also said that the bonds attracted many Chinese investors and applied sustainable financing policies in Asia and Africa. He said that the bonds are aligned with the sustainable financing framework that the Egyptian sovereign wealth fund announced at the Finance Day of the Climate Summit hosted by Egypt.
He explained that the bonds serve as a new gateway for increasing cooperation between Egypt and China, exchanging experiences, and opening new opportunities for achieving sustainable development goals. He said that the bonds also promote green and sustainable financing and encourage investment as one of the key pillars of Egypt’s strategy for the 2023 sustainable development goals.
