Egypt is poised to sell the first-ever sovereign green bond from the Middle East and North Africa as soon as on Tuesday as the nation readies anti-pollution and renewable-energy projects.
The $500 million sale of five-year notes will go ahead subject to market conditions, according to a person familiar with the matter who asked not to be identified because the details aren’t public.
Egypt has prepared a $1.9 billion portfolio of potential green projects as part of a wider strategy aimed at locking in new sources of financing and broadening its investor base. It’s seizing on a global surge in investor interest in environmentally-friendly financing: the assets of sustainable index mutual funds and exchange-traded funds have doubled to $250 billion in the past three years, according to Morningstar.
“Egypt has a lot of natural potential to develop renewables, especially solar projects,” said Apostolos Bantis, a Managing Director at UBP’s Fixed Income Advisory Team. “Gaining access to the green bond market would allow the country to advance its renewables energy investments while also building a reputation as a forward-thinking energy developer.”
The country has mandated Crédit Agricole CIB and HSBC Holdings Plc as joint structuring advisers. Citigroup Inc., Crédit Agricole, Deutsche Bank AG and HSBC have been hired as joint lead managers and joint bookrunners to arrange a series of individual investor calls to present its Green Financing Framework.
The country also plans to issue its first sukuk, or Islamic bonds, in both local and international markets in the fiscal year that started in July. After a record Eurobond sale in May, the Arab world’s most populous nation is considering issuing up to $7 billion this fiscal year.
International investors have pumped billions of dollars into Egypt’s debt market since a 2016 currency devaluation, part of a sweeping economic program. Foreign holdings of local debt jumped to $16.9 billion by end of August from $14.1 billion a month earlier.