Egypt’s Ministry of Finance successfully issued the first public sovereign green bond offering in the Middle East and North Africa, at a value of $750 million for five years, exceeding the government’s expectations of $500 million. The bonds are important to finance the country’s expenditures related to green projects as part of the Egypt Vision 2030, which gives priority to green investments. The sale consisting of five-year notes will help finance a total of $1.9 billion worth of the country’s green projects across sectors like clean transportation, renewable energy and sustainable water management.
Attracting around $3.7 billion worth of orders helped to lower the yield from 5.75 per cent to 50 bps lower at 5.25 per cent. According to sources, this green bond issuance witnessed a good turnout from investors receiving 7.4X total purchase orders against the announced $500 million issue and 5X total purchase orders against the acceptable $750 million issue. The investor mix comprised of asset managers, pension funds, insurance and investment funds, and banks, from across Europe, the United States of America, East Asia and the Middle East.
The Egyptian government is working towards diversifying its debt and transition towards a longer-term debt which it expects will have a 52 per cent share in the total borrowings by 2022. The recent sovereign green bond sale is part of this diversification strategy. Credit Agricole, HSBC, Citibank, and Deutsche Bank acted as advisors for this transaction.