The African Development Bank Group’s (AfDB) board has approved on Saturday Egypt’s Partial Credit Guarantee of $345 million equivalent in Renminbi to increase access to the Panda bond market to finance green and social projects.
The announcement came ahead of AfDB’s Annual Meeting 2023, which scheduled to take place from 22 to 26 May in Sharm El Sheikh city.
The new guarantee will allow Egypt to raise the equivalent of $500 million in the Panda Bond market, which are bonds denominated in Chinese yuan issued by foreign borrowers, bank’s statement mentioned.
Egypt’s Minister of International Cooperation said, “issuing international bonds in an untapped new market, backed by the AfDB, helps diversify financing sources and builds on previous efforts, including the green bonds launched in 2020.”
The new grant paves the way to explore new avenues to meet Egypt’s strategic goals by entering new markets and widening investor horizon, as well as achieving Egypt’s Vision 2030 targets, Minister of Finance, Mohamed Maait added.
Mohamed El Azizi, AfDB’s Director General for North Africa explained that this partial credit guarantee will also enable Egypt to enhance its credit rating and catalyse financing from international investors on competitive terms and pricing.
It is worth mentioning that the bonds will be used for clean transportation; renewable energy; energy efficiency; sustainable water and wastewater management; financing for MSMEs, and essential health services initiatives, among others.