Egypt launches its 1st Green Bonds on LSE

In a virtual event today, Egypt launched its debut green bond issuance on the London Stock Exchange (LSE).

Worth $750 million, the five-year green bonds represent the largest green bond issuance ever in the MENA region, and the first sovereign bond to list on the LSE.

Interim CEO of the LSE Denzil Jenkins, Egyptian Finance Minister Dr. Mohamed Maait and UK Minister for the Middle East James Cleverly recorded messages for the virtual market open ceremony, expressing their support for such a move.

The listing furthers the UK and Egypt’s shared ambitions to work towards a green and resilient recovery from COVID-19, and supports climate priorities in the run up to the UN Climate Change Conference, COP26, and beyond. This new bond issuance also demonstrates Egypt’s commitment to sustainable development and its role as an innovative leader in the region.

Both Minister Cleverly and CEO of the LSE Jenkins welcomed the decision to list the bonds in London as a sign of continued UK-Egypt partnership on the climate agenda.

UK Middle East Minister James Cleverly said: “The listing of the first ever Middle Eastern sovereign green bonds on the London Stock Exchange marks a historic moment between the UK and the Middle East. From London to Cairo, and across the world, we need ambitious and forward-thinking action like this to protect the environment, and ensure a green and resilient recovery from COVID-19.”

CEO of the LSE Denzil Jenkins said that the success of this inaugural transaction highlights Egypt’s commitment to building a sustainable future and paves the way for many more issuers in the region to follow this example.

Dr. Mohamed Maait, Egyptian Minister of Finance, said: “We are pleased to join the group of sovereign green bond issuers that play a leading role in green development, and we value the great turnout of investors for this successful issuance, which demonstrates their support and confidence in the government's efforts to persify the financing needed to achieve sustainable development goals.”

He added that the proceeds of the green bond will be used to finance expenditures related to environmentally friendly green projects, and to achieve Egypt's sustainable development plan in the areas of clean transportation, renewable energy, reducing and controlling pollution, adapting to climate change, raising energy efficiency, and sustainable management of water and sanitation, in light of Egypt Vision 2030, which gives priority to green investment projects.

He pointed out that this issuance witnessed a great turnout from investors, as purchase orders exceeded the volume of the announced issuance of $500 million by 7.4 times, and were five times more than the issued size, noting that this issuance attracted a new base of investors in Europe, the United States of America, East Asia and the Middle East at rates: 47%, 41%, 6%, and 6%, respectively.

The minister explained that the very strong subscription to the government sovereign green bond offering, announced from Cairo, which reached more than $3.7 billion, helped the Ministry of Finance reduce the interest rate on the bonds offered by about 50 basis points compared to the opening prices announced at the beginning of the offering process. This reflects the increasing demands on international green bonds that Egypt is offering for the first time in its history, and the increasing investor confidence in the economic, financial and monetary conditions of Egypt, its future and its commitment to sustainable development policies.

British Ambassador to Egypt Sir Geoffrey Adams said:

“The UK is very proud to see Egypt’s first listing of green bonds on the London Stock Exchange. This is a real milestone in bilateral cooperation between our countries in the shared fight against the negative impacts of climate change. It is also a reflection of the UK and Egypt’s common goals on climate adaptation and resilience as we look ahead to COP26, which the UK will co-host, in partnership with Italy, in Glasgow in November 2021.”