Egypt has issued 3-year sustainability panda bonds worth $478.7 million (RMB 3.5 billion) to become the first country in the African continent to do so, as it grapples with an expanding foreign debt repayment schedule.
The African Development Bank and the Asian Infrastructure Development Bank provided partial credit guarantees to support the issuance, paving the way for other African countries to access fast-growing Chinese debt capital markets.
“Egypt is the first African sovereign to issue panda sustainable bonds in the Chinese financial markets,” said Dr Mohamed Maait, Egypt’s Minister of Finance.
“We have paved the way for alternate, sustainable financing for our African neighbours and have deepened the partnership with our Chinese counterparts.”
Panda bonds are issued in China’s domestic capital market by foreign issuers, typically governments or corporations, and are denominated in Chinese yuan.
Egypt will use the proceeds for inclusive growth and green objectives under its sovereign sustainable financing framework.
The framework, which was unveiled last year, targets sustainable development through investments in clean transportation, renewable energy, energy efficiency, sustainable water and wastewater management, financing for SMEs and health services initiatives.
Egypt has previous experience tapping sustainable bond markets. The Arab world’s most populous nation became the first country in the MENA region to issue a green bond in 2020. Last year, the Egyptian government issued a Samurai bond worth $500 million (JYP 60 billion).
