The Egyptian government plans to issue green bonds worth $700m through one of its entities under the Ministry of Electricity. The bonds will fund a green project that will benefit the private sector or involve a partnership with it, according to sources who spoke to Daily News Egypt.
The sources said that the International Finance Corporation (IFC) will act as an adviser for this issuance and may also underwrite it. They said that the issuance is expected to take place next year.
The sources also said that the issuance is still under study and that the Organization for Economic Cooperation and Development (OECD) will provide the necessary support to Egypt in this process. They said that this is part of the government’s goal to increase its investments in green projects by 50% by 2025.
Egypt will also consider issuing sustainability bonds and social bonds at a later stage, after gaining experience in all types of issuances. This will diversify the debt instruments market and attract foreign investors.
Green bonds are fixed-income instruments that allocate their proceeds to finance or refinance eligible green projects in the green assets portfolio.
Some of the projects that can be financed by green bonds are renewable energy, energy efficiency, sustainable waste management, sustainable land use, clean transportation, sustainable water management, climate change adaptation, and new cities.
Egypt has previously issued green bonds worth $750m to mobilise resources for green projects, especially in the field of clean transportation. This made Egypt the first country in the Middle East and North Africa region to issue green bonds in the fiscal year 2020-2021.
This type of bond attracts investors who focus on sustainable and responsible investments and who consider environmental, social, and governance criteria in their investment analysis.
