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Wednesday, 21 October 2020

Monorail, water treatment projects in Egypt to receive USD 500 mn in green bond funding

Now we know who’s getting that green-bond financing: The new monorail project, three wastewater treatment facilities, and a desalination plant will be partially funded through USD 500 mn of last month’s USD 750 mn green bond issuance, according to Al Mal, which obtained a list of the projects. Environment Minister Yasmine Fouad said earlier this week that the government selected five projects out of a list of 41 to receive two-thirds of the proceeds from the sale, but stopped short of disclosing which projects would get the funding. According to Al Mal, the government has allocated the funds to the new capital and sixth of October monorails, a desalination plant in El Dabaa, and wastewater treatment plants in east Alexandria, Arab El Madabegh village in Assiut Governorate, and Al Ayat in Giza.

Preventing a water crisis is a top priority for the government and funding new desalination plants and wastewater treatment facilities is seen as the best way ahead as climate change and the Grand Ethiopian Renaissance Dam threaten to reduce the country’s water supply. The government is spending some EGP 134.2 bn through 2050 to build seawater desalination plants that would provide some 6.4 mn cbm/d of water. The plan spans over six five-year phases, the first of which will see the government investing EGP 45 bn to build 47 desalination plants by 2025.

The new USD 4.5 bn monorail project extends a 54-km line (expected to be completed in 2022) between the new capital and Nasr City, and another 42-km line (scheduled for completion in 2023) from Sixth of October City to Gameat El Dowal.

Background: The five environmentally friendly projects were selected from a longlist of 41 to receive USD 500 mn in funds generated by Egypt’s USD 750 mn maiden green bond sale. The remaining USD 250 mn will be allocated to other unnamed projects from the longlist. The World Bank is consulting the government in preparing annual reports on the allocation of funds from the sale. Al Tamimi and Company acted as the government’s legal advisor on the issuance, the office said in a press release (pdf)

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