Egypt has become the first country in the Middle East and North Africa to issue sustainable Panda bonds. The bonds, which total ¥3.5 billion ($500 million), will have a yield of 3.5 percent over three years.
The Ministry of Finance has confirmed that the bond issuance is supported by a number of international banks, including the African Development Bank (AFDB) and the Asian Infrastructure Investment Bank (AIIB). Egyptian Minister of Finance, Mohamed Maait, has stated that the bonds have generated significant interest from Chinese investors.
Maait has noted that the bonds will help to strengthen bilateral cooperation and facilitate opportunities to achieve sustainable development goals (SDGs) and Egypt Vision 2030. The funds raised will be used to help Egypt reduce carbon emissions and promote the use of renewable and alternative energy sources, including green hydrogen, as part of its National Climate Change Strategy 2050.
Maait has previously stated that Egypt has a financial gap of $6 to $8 billion for FY2023/2024, which can be partially met by issuing Samurai and Panda bonds. Egypt has a total external debt of $165.3 billion and will need to pay $71.6 billion in debt service in the coming three years, including $29.23 billion in 2024. In August, Egypt’s foreign assets deficit was nearly $25.92 billion and the country aims to collect $191 billion in annual US dollar revenues.
