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Friday, 18 June 2021

Egypt gears up for first of its kind governmental green bond issuance

An informed source at the finance ministry told Ahram Online that the issuance is expected to be carried out before the end of 2020

Doaa A.Moneim , Sunday 27 Sep 2020
Maait
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Egypt is set to issue sovereign green bonds, which will be the first of their kind in the Middle East and North Africa (MENA), Minister of Finance Mohamed Maait announced on Sunday.

An informed source at the finance ministry told Ahram Online that the issuance is expected to be carried out before the end of 2020.

“The sovereign green bond programme will help us raise capital from investors who care for both environmental and financial returns. The issuance of international government green bonds in the global markets will enhance the environmental rating of Egypt in addition to increasing the confidence of foreign investors in the Egyptian economy and supporting its current and future growth levels,” Maait stated.

In a statement, the minister said that to ensure the most efficient coordination and management, Egypt’s climate policies are managed by the National Council on Climate Change (NCCC), which is chaired by Egypt’s prime minister, adding that the council provides strategic direction and ensures smooth coordination across all entities.

“Accordingly, Egypt’s government is pursuing an ambitious plan to upgrade its infrastructure across all sectors and regions in the country for greater energy efficiency and resource conservation,” said Maait.

He noted that Egypt has adopted a green bond framework for the issuance of sovereign green instruments, signalling its commitment to its environmental and sustainable development objectives.

“We congratulate the government of Egypt for piloting this new sustainable financing solution, and we remain committed to supporting its environmental, social and economic development,” said World Bank Country Director of Egypt Marina Wes.

Wes added that given that the global leader in sustainable finance, the World Bank was delighted to share its knowledge and experience with the government and looks forward to providing technical assistance for post-issuance allocation and impact reporting supported by the Government Debt and Risk Management Program funded by Switzerland through its State Secretariat for Economic Affairs – SECO.

“We are honoured to have had the opportunity to support Egypt in structuring its Green Financing Framework in line with the current best market practices. Thanks to the efficient collaboration between all the ministries involved, this robust Green Finance Framework highlights Egypt’s leadership in sustainable development and sustainable finance in the Middle East and North Africa region,” said Farnam Bidgoli, Head of Sustainable Bonds, HSBC, and Antoine Rose, Sustainable Banking CA-CIB.

"Egypt’s green bond framework is aligned with the International Capital Markets Association Green Bond Principles (2018) and sets out the processes that will be used to ensure transparency and disclosure about the use of proceeds and environmental impact, in keeping with international best practice," they added.

Vigeo Eiris, a Moody’s Affiliate, has independently reviewed the framework and assessed it to be in line with Egypt’s strategic sustainability priorities, the ministry said in the statement.

Green bond proceeds will be used to support projects that reflect Egypt’s commitment to the United Nations Sustainable Development Goals (UN SDGs) and aligned with the three dimensions of sustainable development: economic, social and environmental in Egypt’s Sustainable Development Strategy Vision 2030, according to the World Bank.

Egypt obtained a robust second opinion for the quality of Eligible green projects and its framework, said the World Bank.

Egypt has a portfolio of eligible green projects of $1.9 billion, of which approximately 16 percent for renewable energy, 19 percent for clean transportation, 26 percent for sustainable water and wastewater management, and 39 percent for pollution prevention.

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