Egypt Issues Green Bonds on Global Market

The Ministry of Finance announced that preliminary measures have been taken to launch the first sovereign government issuance of green bonds on the global market, making Egypt the first country in the Middle East and North Africa region (MENA) to issue that type of bond.

The Finance Ministry said in a statement on Friday that the issuance of sovereign green bonds aims to persify funding sources and expand the investor base in the Egyptian market, as well as reducing the cost of financing on government securities, and establish Egypt's pioneering role in adopting policies aimed at encouraging clean investments in the region, and providing sustainable financing for environmentally friendly projects.

Mohamed Maait, Minister of Finance, said that HSBC, Credit Agricole, "Citibank" and "Deutsche Bank" were selected from among 17 offers of major international and investment banks, to play the role of promoting the green bond issuance offering.

He added that Credit Agricole and HSBC banks were chosen to act as a structural advisers for the offering in a way that contributes to formulating the state's vision towards strengthening green areas, including the policies and reforms undertaken by the Egyptian government in the field of environmental protection and rationalization of the use of resources.

The issuance is also aimed at preserving the environment for future generations, expand the use of clean energy fields, and target the creation of  developed green cities.

Maait stated that the international tender was conducted to select "offering managers" and structural consultants according to the approved international standards, and that receiving a large number of offers from major international investment banks reflects the desire of these institutions to participate in the first Egyptian government offering of green bonds.

He pointed out that a ministerial committee has been formed under the chairmanship of the Ministry of Finance and the membership of all concerned government agencies to lay the foundations and rules necessary to launch the first green bonds in the MENA, thus contributing to strengthening the environmental classification of Egypt and increasing the confidence of foreign investors in the national economy, and support its levels of sustainable growth.

Ahmed Kouchouk, Vice Minister of Finance for Fiscal Policies and Institutional Reform said that the issuance of green inter-governmental bonds places Egypt on the map of sustainable financing, in line with the sustainable development goals in accordance with the vision Egypt 2030 and in a manner that helps the private sector in creating a reference margin that helps in pricing green bonds.

This comes in light of the increasing global tendency in the green bond market, and the trend towards environmentally friendly projects, fighting climate change.