Back to the complete issue
Wednesday, 13 March 2019

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.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2021 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of Commercial International Bank (tax ID: 204-891-949), the largest private-sector bank in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; and Act Financial (tax ID: 493-924-612), the leading activist investor in Egypt; and Abu Auf (tax ID: 584-628-846), the leading health foodmaker in Egypt and the region.