Government is considering issuing green bonds locally
EXCLUSIVE- Egypt considers local green bond issuance: The Madbouly government is studying the possibility of moving ahead with a local issuance of green bonds in tandem with a planned international issuance in 4Q2018-19 or 1Q2019-20, a senior government official told Enterprise. The issuance of green bonds comes as part of the government’s new comprehensive debt strategy that aims to diversify the treasury’s sources of financing. The government is also mulling whether to float local-currency bonds internationally.
What’s a green bond? Effectively, a lower-yield form of bond that finances “climate-smart” projects including renewable energy and energy-efficiency projects in emerging markets. The International Finance Corporation and the Financial Regulatory Authority have been discussing since June what guidelines for Egyptian green bonds might look like. You can read more about green bonds here courtesy the IFC, which notes that more than USD 155 bn has been raised via green bonds globally.
Background: The Finance Ministry is looking to deploy new debt instruments as it tweaks the mix and tenor of funding instruments it uses. Vice Minister of Finance Ahmed Kouchouk said last month that Egypt aims to see long-term domestic bonds rise to account for about 70% of annual offerings by 2020. His remarks came after Egypt sold USD 4 bn worth of USD-denominated eurobonds. Egypt is planning to offer up to USD 7 bn in foreign-currency-denominated bonds in 1Q2019, and more USD- and EUR-denominated bonds by the end of 2Q2019, Finance Minister Mohamed Maait had said in January.