In a bold move to reinforce Egypt’s green financing capacity and diversify its access to international capital markets, the African Development Bank (AfDB) plans to provide a $400 million partial credit guarantee (PCG) to support the country’s forthcoming sustainable Samurai bond issuance, according to Abdelrahman Diaw, the Bank’s Country Manager for Egypt.
The initiative, expected to be presented to AfDB’s board in September 2025, is designed to support a $500 million yen-denominated bond offering in Japan—marking Egypt’s first entry into the Samurai bond market with a sustainable finance instrument.
“This instrument opens the door to Japanese investors under favorable financing conditions,” Diaw said. “The guarantee provides a vital comfort layer for investors, especially amid ongoing global caution toward emerging-market debt.”
Bolstering Egypt’s Green Finance Profile
The Samurai bond issuance is the latest in a series of green finance efforts supported by the AfDB. In May 2023, the Bank approved a $330 million credit guarantee for Egypt’s debut Panda bond in the Chinese market, a landmark sustainable debt issuance that enabled Egypt to tap Asia’s deep capital pools with enhanced investor confidence.
The new Samurai bond, backed by the AfDB’s PCG, underscores Cairo’s commitment to environmental financing tools while enabling it to access longer-term borrowing at more competitive interest rates. The move aligns with broader trends in sustainable development financing, particularly in emerging markets striving to reduce reliance on conventional debt and pivot toward climate-aligned instruments.
A $746 Million Investment Portfolio in 2025
The Samurai bond guarantee is just one component of the $746 million in total funding the AfDB has allocated to Egypt in 2025. The year’s portfolio includes both sovereign and non-sovereign operations, covering four strategic projects:
- Expansion of Minapharm’s pharmaceutical production facilities
- JELES initiative to promote job creation, entrepreneurship, and livelihoods
- The Samurai bond guarantee
- A large-scale solar project in Upper Egypt featuring a battery energy storage system (BESS) and high-voltage transformer station, to be implemented by the private sector
The Bank’s 2025 Egypt portfolio prioritizes financial sector development, which accounts for 31% of total allocations, followed by energy (21%), multi-sectoral projects (19%), agriculture (10%), water and sanitation (9%), transport (8%), and just 1% each for social development and industrial/mining sectors.
AfDB also plans to maintain its current funding level through 2026, bringing the two-year commitment to approximately $1.5 billion.
Active Portfolio: $2.045 Billion in Ongoing Projects
Diaw noted that the Bank’s current active portfolio in Egypt totals $2.045 billion, distributed across public and private sector initiatives. The private sector constitutes a robust 39% of this portfolio, amounting to $800 million across 13 projects, including:
- 7 energy projects (53% of the private-sector share)
- 3 finance projects (38%)
- 1 project each in health, industry/mining, and agricultural processing
These efforts are aligned with the AfDB’s Egypt Country Strategy (2022–2026), which focuses on enhancing competitiveness and private sector–led economic growth.
Major Sanitation Investments
In the water and sanitation sector, the AfDB is currently spearheading the third phase of the Gabal El Asfar Wastewater Treatment Plant, with a financing package of €110 million, co-funded by the French Development Agency and the European Union. This expansion will add 1 million cubic meters/day in treatment capacity, serving an additional five million residents in East Cairo. Operations are expected to begin in late 2025, with completion by 2030, pending final parliamentary approval.
In West Cairo, the Bank plans to finance the fourth phase of the Abu Rawash Wastewater Treatment Plant, with a planned investment of €50 million, expanding capacity by 400,000 cubic meters/day to serve eight million people.
AfDB is also supporting the Integrated Rural Sanitation Program in Luxor, with potential expansion into Beni Suef, Aswan, and Qena provinces—highlighting the Bank’s long-term commitment to clean water and sanitation access.
Green Hydrogen, Pharmaceuticals, and Industrial Sovereignty
Diaw confirmed that the AfDB is closely monitoring the potential for green hydrogen investments in Egypt. In the pharmaceutical sector, Egypt’s position as the largest pharmaceutical market in the Middle East and North Africa has drawn particular attention from the AfDB. In March 2025, the Bank approved a €15 million loan to Minapharm Pharmaceuticals to support production upgrades.
Moreover, the Bank is currently evaluating Egypt’s proposal to establish Africa’s first facility for manufacturing active pharmaceutical ingredients (APIs) for small-molecule drugs. The project is expected to be submitted to the Board for approval by year-end 2025.
AfDB is also considering support for mid-sized pharmaceutical companies through local commercial banks—part of a broader effort to deepen Egypt’s industrial sovereignty and improve regional access to essential medicines.
Supporting MSMEs and Future Lending
Over the past three years, AfDB has provided $293 million in financing to Egyptian banks for the support of micro, small, and medium-sized enterprises (MSMEs). Diaw emphasized that future support will depend on performance monitoring and the impact of previously disbursed funds.
