International Finance Corporation (IFC), a World Bank member, announced that it is investing $100 million in Egypt's first private sector green bond, which will be issued by the Commercial International Bank (CIB) in June.
CIB’s green bond is expected to increase lending to businesses that are willing to invest in eco-friendly initiatives and projects, including green buildings, and renewable energy and energy efficiency.
IFC said that the debut issuance is an important milestone in a multi-year effort introduced by the government, Egypt's private sector and IFC to grow Egypt's capital market for green finance in the country and to help close infrastructure financing gaps.
"Egypt is taking strides towards the achievement of its 2030 development agenda, which is in line with the global sustainability goals. In 2020, the government of Egypt launched its first sovereign green bond offering, that was five times oversubscribed. At the Ministry of International Cooperation, we aim to capitalize on this success by curating impactful partnerships to push towards the green recovery," said Egypt’s Minister of International Cooperation Rania Al-Mashat.
Al-Mashat noted that IFC and CIB partnership is a proof of the global eagerness for more private-led green investments, adding that green bonds are essential for a purpose-driven economy that pushes towards sustainable projects and encourages investors into not only thinking but as well acting green.
"Because we realize the importance of promoting sustainable finance as a pathway to the 2030 agenda, the SDGs and the Paris agreement, we have been diligently working to put forward all required regulations and simultaneously working on market development and engaging potential issuers by removing any challenges that might face them," said head of the sustainable development department at Egypt’s Financial Regulatory Authority, Sina Hbous.
"We are building on our multi-year strong partnership with IFC to expand our funding options and introduce a new asset class to the Egyptian capital market,” said Hussein Abaza, CIB’s CEO and managing director.
Sérgio Pimenta, IFC’s Vice President for Middle East and Africa, said that addressing climate change is a priority for IFC in Egypt as well as across the MENA.
"With this landmark transaction, we aim to encourage more private sector investment in long-term climate-smart projects, paving the way for job creation, sustainable growth, and a more resilient and green recovery from the COVID-19 pandemic,” Pimenta added.
IFC is one of the earliest issuers of green bonds, launching its first such issuance in 2010 to help spur the market and unlock investment for private sector projects that support renewable energy and energy efficiency.
Since the launch of its green bond program in 2010, IFC had issued $10.6 billion across 178 green bonds in 20 currencies.
To date, IFC has supported five financial institutions to issue debut green bonds in Africa.