Egypt Prepares to Make its Mark in the Green Bond Market

Cairo, September 27, 2020. The Arab Republic of Egypt has adopted a green bond framework for the issuance of sovereign green instruments, signaling its commitment to its environmental and sustainable development objectives.

The Ministry of Finance is preparing for its debut sovereign green bond issuance, which will be the first in the Middle East and North Africa region. “The sovereign green bond programme will help us raise capital from investors who care for both environmental and financial returns,” said Mohamed Maait, Finance Minister. “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.” To ensure most efficient coordination and management, Egypt’s Climate Policies are managed by the National Council on Climate Change (NCCC) which is chaired by His Excellency Egypt Prime Minister. The council provides strategic direction and ensure smooth coordination across all entities.

Accordingly, the Government of Egypt is pursuing an ambitious plan to upgrade its infrastructure across all sectors and regions in the country for greater energy efficiency and resource conservation. The development of the framework was led by Ministry of Finance by conducting meetings and workshops with the Ministry of Planning and Economic Development, Ministry of Electricity and Renewable Energy, the Ministry of Environment, Ministry of Transport and Ministry of Housing, Utilities and Urban Communities which welcomed this matter and pledged to support it. They provided the lists of Eligible Green Projects, and the required information as per the structuring advisers’ guidance (Crédit Agricole CIB and HSBC ) whereby their valuable participation resulted in producing the Sovereign Green Financing Framework.

“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 Marina Wes, World Bank Country Director of Egypt. “As 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 honored to have had the opportunity to support the Arab Republic of 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 the Egypt’s leadership in sustainable development and PUBLIC 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". Vigeo Eiris, a Moody’s Affiliate, has independently reviewed the framework and assessed it to be in line with Egypt’s strategic sustainability priorities.

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. Egypt obtained a robust Second Opinion for the quality of Eligible Green Projects and its Framework.

Egypt has a portfolio of eligible green projects of USD1.9 bn, of which approximately 16% is renewable energy, 19%, clean transportation, 26% sustainable water and wastewater management, and 39% pollution prevention and control (as of Sep 2020).