Egypt sold $750 million in five-year Green bonds on Tuesday, a document showed, in the first sale of such bonds by a government in the Middle East and North Africa region.

The deal offered investors a 5.25% yield, around 50 basis points less than where it was marketed earlier on Tuesday.

“They are planting the flag of their commitment to sustainability,” said a person familiar with the transaction.

He said the aim was to diversify Egypt’s investor base and make people aware of the country’s progress on sustainability.

“The investor presentation was attended by many who are speaking to Egypt for the first time, we were fielding calls for sustainability analysts and global investors,” he added.

Proceeds from the debt sale will be used to finance or refinance green projects in sectors such as transportation, renewable energy and energy efficiency.

“The bonds offer value when compared to the existing secondary Egyptian curve,” Zeina Rizk, executive fixed income director at Arqaam Capital, said when the deal was marketed.

“I think they might tighten as they will attract sustainability-focused investors but given the recent weakness we have seen in the markets driven by a fear of a second wave, and some sort of market indigestion from the large number of new issues, market participants are more selective.”

The investor presentation for the bond lists Egypt’s commitments to a sustainable strategy, and includes rationalising water consumption, protection of the coasts and investing in renewable energy.

Green bond issuance has soared in 2020, with Germany joining other European countries in issuing a debut Green bond earlier this year.

A slew of European corporate borrowers have issued debt linked to sustainability goals, many of them for the first time, including fashion labels Chanel and Burberry.

In the Middle East, Saudi Electricity and Qatar National Bank issued Green bonds this month, and expectations are for more issuance in the region in the coming months.

Credit Agricole, Citi, HSBC and Deutsche Bank managed Egypt’s bond issue.

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