Egypt has successfully issued a three-year Sustainability Panda Bond worth RMB 3.5 billion (USD 478.7 million), making it the first African nation to do so.
Panda bonds are a financial instrument issued in China’s domestic capital market by foreign entities, typically governments or corporations. These bonds are denominated in Chinese yuan.
Read more: CMA adds Kirinyaga Slopes to ranks of licensed coffee brokers
The issuance of the Panda Bond was made possible with the support of the African Development Bank and the Asian Infrastructure Development Bank, both of which provided partial credit guarantees. These guarantees played a crucial role in attracting investors and securing competitive terms for the transaction. The Bank of China Limited, with the support of HSBC Bank (China) Company Limited, served as the lead underwriter and bookrunner for the initiative.
Dr. Mohamed Maait, Egypt’s Minister of Finance, emphasized the significance of this achievement, stating, “Egypt is the first African sovereign to issue Panda Sustainable Bonds in the Chinese Financial Markets. This is a historical move not just for the country but for the entire continent. We have paved the way for alternate, sustainable financing for our African neighbors and have deepened the partnership with our Chinese counterparts. It’s more than just a financing source; it’s a testimony of how important our economic and financial ties are with the Government of China.”
The bond proceeds will be used by Egypt to drive inclusive growth and promote green initiatives, all in alignment with its Sovereign Sustainable Financing Framework. Launched ahead of the COP27 climate conference held in Egypt last year, this framework is designed to support sustainable development through investments in various sectors, including clean transportation, renewable energy, energy efficiency, sustainable water and wastewater management, financing for micro, small, and medium-sized enterprises, and essential health services initiatives, among others.
The Director General for North Africa at the African Development Bank, Mohamed El Azizi, highlighted the opportunity for African Development Bank Regional Member countries to leverage the Bank’s AAA credit rating to access new markets and secure sustainable financing at competitive terms.
Acting Director for Financial Sector Development at the African Development Bank Ahmed Attout, also expressed the bank’s commitment to expanding access to sustainable financing across the African continent. He stated, “Egypt’s Panda Bond transaction shows our unwavering commitment to deepen the continent’s access to sustainable financing at scale, which, to date, is very small. While Egypt may be the first African nation to issue on the Panda Bond Market, it won’t be the last, as we stand ready to support Regional Member Countries to mobilize new development financing at scale on both local and international capital markets.”
Read more: Labor court hands ex-FKF staff win in unpaid salary case
Egypt has a track record of tapping into sustainable bond markets, having become the first country in the Middle East/North Africa region to issue a green bond in 2020. In 2022, Egypt also made history as the first African and Middle Eastern nation to access Japanese capital markets by issuing a Samurai bond of 60 billion Japanese yen (approximately USD 500 million).
Email your news TIPS to editor@thesharpdaily.com
