Egypt issues first green bonds in MENA

Egypt issues first green bonds in MENA
Green bonds are debt instruments to obtain financing for projects related to the climate or environment. (Shutterstock)
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Updated 29 September 2020

Egypt issues first green bonds in MENA

Egypt issues first green bonds in MENA
  • Egypt has a portfolio of eligible green projects worth $1.9 billion

CAIRO: Egypt on Tuesday issued its first-ever green sovereign bonds, the first in the Middle East and North Africa (MENA), as part of its efforts to implement renewable energy projects to combat pollution.
Green bonds are debt instruments to obtain financing for projects related to the climate or environment, according to a statement by Egypt’s Finance Ministry.
The state used Credit Agricole, CIB and HSBC Holding banks as structural advisors. Citigroup, Credit Agricole, Deutsche and HSBC banks were hired as joint managers for the offering.
Finance Minister Mohamed Maait said offering the green sovereign bonds in global markets will raise foreign investors’ confidence in Egypt’s economy, support its current and future growth, attract investors interested in environmental and financial returns, and improve the country’s environmental rating.
Egypt has a portfolio of eligible green projects worth $1.9 billion, 16 percent of which are in renewable energy, 19 percent for clean transportation, 26 percent for sustainable water and wastewater management, and 39 percent for pollution reduction and control.
Maait said Vigeo Eiris, an entity affiliated with American financial services company Moody’s, conducted the independent review and evaluation, in line with Egypt’s strategic sustainability priorities.
“We obtained a strong second party’s opinion on the quality of eligible environment-friendly projects,” he added. 
Maait said the proceeds from the green bonds will be used to finance projects that reflect Egypt’s commitment to the UN’s Sustainable Development Goals.
Marina Weiss, regional director of the World Bank in Egypt, said the bank is ready to share knowledge and experience with the government, and to provide technical assistance for post-issuance allocation and preparation of the necessary annual reports.
Varnam Pedgoli, head of sustainable bonds at HSBC, and Antoine Rose, head of sustainable banking at Credit Agricole, said Egypt’s framework for green bonds is in line with the principles of green bonds of the International Capital Markets Association, as it includes the procedures followed to ensure transparency while maintaining international best practices.
Economist Abdul-Rahman Taha said the green economy is a global trend that will have a positive impact on Egypt’s budget and increase the volume of foreign investment.
He added that he expects green bonds to become widely popular in Egypt.


Egyptian minister hails reforms as public investment jumps 70%

Updated 8 min 56 sec ago

Egyptian minister hails reforms as public investment jumps 70%

Egyptian minister hails reforms as public investment jumps 70%
  • The rate of economic growth reached about 1.8 percent — less than the population growth rate
  • A plan to control population increase will begin in January 2021

CAIRO: The volume of public investment in Egypt grew by 70 percent in the 2020/2021 fiscal year, reaching 595 billion Egyptian pounds ($37.9 billion), Minister of Planning and Economic Development Hala Al-Saeed has said.

In a speech at the Egypt Economic Summit 2020, she said that Egypt could become one of only three economies across the Middle East to achieve economic growth this year.

The growth followed reforms that helped make the Egyptian economy “more flexible” and “able to absorb external shocks,” she said.

Al-Saeed said Egypt faced great challenges that led to imbalances in the monetary, financial and external axes, which caused a decline in Egyptian economic indicators. The rate of economic growth reached about 1.8 percent — less than the population growth rate.

The minister added that a plan to control population increase will begin in January 2021, as Egypt’s population is expected to grow by 2.5 million annually and reach 130 million in 2030.

Al-Saeed said that achieving development requires sustained economic progress to overcome weak population growth and the challenges facing the Egyptian economy in light of political and economic changes and the coronavirus pandemic.

The challenge helped Egypt commit to reforms based on comprehensive planning and an ambitious vision for the future, in the form of Egypt’s Vision 2030 sustainable development strategy, the minister said.

Egypt’s implementation of reforms since November 2016 led to “overall stability” and “comprehensive growth.” This was reflected in positive indicators that the Egyptian economy saw before the coronavirus outbreak, she added.

The rate of economic growth was about 5.6 percent in the first half of the 2019/2020 fiscal year, and about 5 percent during the third quarter. There was an average growth of 5.4 percent in the first nine months of the year, before the coronavirus outbreak.

Al-Saeed said that international institutions had “positive expectations” regarding the Egyptian economy.

She referred to the results of the World Economic Outlook report issued by the International Monetary Fund in October 2020, in which the Fund raised its expectations for Egypt’s gross domestic product growth to 3.5 percent for the year, compared with a previous forecast of 2 percent in the June report.

If the prediction is realized, it will make Egypt among only three economies in the Middle East and Central Asia to achieve economic growth this year.