Egypt issues Africa’s first Sustainable Panda Bond worth 3.5 billion RMB backed by African Development Bank and Asian Infrastructure Investment Bank

Egypt has successfully issued a 3-year Sustainability Panda Bond worth  RMB 3.5 billion ($478.7 million). The North African nation is the first on the continent to do so, a move that underscores its commitment to access previously untapped sources of capital to drive economic growth.

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. Panda bonds are issued in China's domestic capital market by foreign issuers, typically governments or corporations, and are denominated in Chinese yuan.

The combined guarantees from the two multilateral development banks with triple-A ratings helped crowd in investors and secured competitive terms for the transaction. The Bank of China Limited, with support from HSBC Bank (China) Company Limited, was the lead underwriter and bookrunner.

Egypt will use the bond proceeds for inclusive growth and green objectives under its Sovereign Sustainable Financing Framework. The Framework, which was launched ahead of the COP27 climate conference held in Egypt last year, targets sustainable development through investments in 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.

Egypt’s Minister of Finance, Dr. Mohamed Maait, said: "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 neighbours 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...Read more on AfDB

Source: AfDB