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Wednesday, 22 May 2019

Egypt plans to issue infrastructure bonds in 2H2019-20

EXCLUSIVE- The government is planning to issue its first international infrastructure bonds in 2H2019-2020, two senior government officials told Enterprise. The bonds will have long maturities and their proceeds will be directed to infrastructure projects, the officials said. The government has begun talks with the China-led Asian Infrastructure Investment Bank over the issuance, which is meant to help the government to diversify its sources of finance. The government plans to borrow USD 6.9 bn from international markets in the coming fiscal year starting July, of which USD 5 bn will be in USD-denominated eurobonds. The first green bond issuance is planned for 4Q2019, the officials said.

What is an infrastructure bond? According to the World Bank (pdf), infrastructure bonds are issued with the purpose of financing infrastructure projects of public interest. Bonds issued by private sector companies are usually subject to concession contracts with the public sector (PPP). The funding is acquired through project finance, with public guarantees often involved.

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