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Egypt to sell its first sovereign green bond


Egypt to sell its first sovereign green bond

Photo: Samuel Habtab/AP Photo

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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