Egypt's Debut International Green Bond: An African First

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Friday, October 09, 2020/ 02:20PM / United Capital Research / Header Image Credit: Brand Spur


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At the end of September 2020, the government of Egypt recorded a first, not only in Africa but also in Middle East (the two regions that the country bridges) as it successfully tapped the international debt capital market to issue a USD-denominated sovereign Green Bond. According to statement from the Egyptian Ministry of Finance, orders worth five times the $750 million raised, turned up for the five-year note and allowed the government to issue at a lower yield of 5.25% (vs. initial target of 5.75%).

 

Notably, the bond forms part of Egypt's strategy to lock-in new financing sources and broaden the country's investor base, steps that could in turn help lower its borrowing costs. Specifically, the $750 million raised, plus that from future planned green issuance, will contribute directly to the financing of $1.95 billion of public investment projects tagged as green by the government. Also, the Green-note issuance follows the country's historic $5.0bn Eurobond issued in May 2020, that helped Egypt finance its Covid-19 response.

 

In all, we believe the success of Egypt's green bond will open further opportunity for other African countries to explore innovative issuances such as this. However, we note that the success of Egypt's issuance can be tied to the government's clear intention to improve environmental outcomes as well as the country's good economic policy record and IMF-anchored reforms over the past few years. Already, the Nigerian government have issued green bond in the domestic market and current reforms going on within the country further strengthens the investment case for an international green bond.

 

Top African Stories

  • Egypt issues first green bonds in MENA Read more

 

  • Nigeria's Ngozi Okonjo in final race to become WTO boss Read more

 

  • Mali's opposition chief Soumaila Cisse released after prisoner swap Read More

 

  • How coronavirus is boosting e-commerce across Africa Read more

 

  • Debt Cancellation for Poor Countries? Read more

 

  • Tunisia: Curfew introduced in Tunis region Read more

 

  • Buhari Presents U.S.$34 Billion Budget to Bolster Economy Read more

 

  • Anger as Zimbabwe Govt Blows Billions in Unauthorised Expenditure Read More

 

  • South Sudan Oil Firm Bids to Set up Regional Refinery Read more

 

Looking Forward

 

Angola

Sep-2020 Inflation Report - October 23rd

Sept-2020 Net Reserves- October 23rd

 

Ghana

Sept-2020 M2 Money Supply - October 24th

Sept-2020 Inflation Report - October 14th

 

Kenya

Q2-2020 GDP Report - October 24th

Aug-2020 Overseas Remittances- October 16th

 

Morocco

Sept-2020 Inflation Report - October 23rd

Sept-2020 Money Supply M3- October 17th

 

Nigeria

Sept-2020 Inflation Report - October 15th

Sept-2020 Private Sector Credit- October 28th

 

South Africa

Aug-2020 Mining Production YoY- October 13th

Aug-2020 Gold Production YoY - October 13th

Aug-2020 Retails Sales MoM - October 14th 

 

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