Egypt launches its 1st green bond offering on London Stock Exchange

CAIRO – 15 OCTOBER 2020: Egypt launched Thursday, in a virtual event, its first green bond offering on the London Stock Exchange (LSE).

The Egyptian government sovereign green bond offering is valued at $750 million with a five year term. This offering is the largest in the Middle East and North Africa region, and the first of its kind on the London Stock Exchange.

The interim executive director of the London Stock Exchange, Denzel Jenkins, Finance Minister Mohamed Maait, and British Middle East Minister James Cleverley sent a message to the opening ceremony of the virtual market, in which they expressed their support for this step, which contributes to strengthening the common aspirations of Egypt and the United Kingdom, and working together for a green recovery from the emerging coronavirus (COVID-19), and supporting climate priorities in the period leading up to the United Nations Conference on Climate Change (COP26), and after it. After him, in a way that demonstrates Egypt's commitment to sustainable development and its role as an innovative leader in the region.

British Middle East Minister James Cleverley and Interim Executive Director of the London Stock Exchange Denzil Jenkins welcomed the decision to list the bonds on the London Stock Exchange, which contributes to deepening the sustainable partnership between the UK and Egypt in the face of climate change.

 “The listing of the first green sovereign bonds in the Middle East on the London Stock Exchange represents a historic moment between the United Kingdom and the Middle East .. From London to Cairo, and across the world, we need ambitious and forward-thinking measures like this to protect the environment and ensure a green and resilient recovery from novel coronavirus,” Cleverley commented.

Jenkins noted, that the success of this inaugural deal highlights Egypt's commitment to building a sustainable future and paves the way for many issuers in the region to follow this approach.

For his part, Maait announced Egypt’s pleasure to join the group of sovereign green bond issuers that play a leading role in green development, and how the government value the great turnout of investors for this successful issuance, which demonstrates its support and confidence in the government's efforts to diversify the financing needed to achieve the goals of sustainable development.

He added that the proceeds of the "green bond" will be used to finance expenditures related to environmentally friendly green projects, and to achieve Egypt's sustainable development plan in the areas of clean transportation, renewable energy, reducing and controlling pollution, adapting to climate change, raising energy efficiency, and sustainable management of water and sanitation, in light of "Egypt Vision 2030", which gives priority to green investment projects

Egypt’s minister explained that this issue witnessed a high turnout from investors, as purchase orders exceeded the volume of the announced issue "$500 million" by 7.4 times, and the acceptable volume exceeded "$750 million" equivalent to 5 times, noting that this issue attracted a new base of Investors in Europe, the United States of America, East Asia and the Middle East: 47 percent, 41 percent, 6 percent and 6 percent, respectively.

The minister continued, that the very strong subscription to the government sovereign green bond offering, announced from Cairo, which reached more than $ 3.7 billion, helped the Ministry of Finance reduce the interest rate on the bonds offered by about 50 basis points compared to the opening prices announced at the beginning of the process. Subtraction; Reflecting the increasing demands on international green bonds that Egypt is offering for the first time in its history, and the increasing investor confidence in the economic, financial and monetary conditions and the future of Egypt and commitment to the sustainable development policies of Egypt.

British Ambassador to Egypt Geoffrey Adams said that the United Kingdom is proud to see the first Egyptian listing of green bonds on the London Stock Exchange. 

“This is one of the features of bilateral cooperation between our two countries in the common struggle against the negative effects of climate change. It is also a reflection of the common goals between the UK and Egypt regarding climate adaptation and resilience as we look forward to COP26, which the UK will co-host, in partnership with Italy, in Glasgow in November 2021,” he added.