Egypt to sell its first sovereign green bond
Egypt is expected to sell its first sovereign green bonds today, becoming the first country in the Middle East and North Africa to do so.
Cairo hopes to gain $750 million from the bond issuance that will go towards funding an ambitious $1.9 billion portfolio of potential green projects. According to Minister of Planning and Economic Development Hala El-Said, Egypt’s investment plans for fiscal year 2020-2021 alone included over 691 environmentally friendly projects, with the construction of an electric train network a key undertaking.
In addition to financing these critical projects, Egyptian officials hope that a robust commitment to a sustainable agenda will raise foreign investors’ confidence in the country, lower Cairo’s borrowing costs and support robust economic growth.
Despite the necessity of raising funds to advance Egypt’s eco-friendly agenda, it is questionable whether issuing debt is the correct avenue to pursue. Cairo’s debt has reached $111 billion in 2020, up from $48 billion in 2015. While Egypt may seek to take advantage of a booming market for green bonds in the short-term, expect Cairo to increasingly target foreign direct investment in the long run as it seeks to lower its debt ratio and pay off loans received from the International Monetary Fund.
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