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The AAIB, secured $300 million from the International Finance Corp. and $100 million each from the European Bank for Reconstruction and Development and British International Investment to invest in industrial energy efficiency, small renewable energy projects and green buildings in Egypt.
Almost 90% of Egypt’s electricity comes from fossil fuels; most of its carbon emissions are caused by electricity generation and fossil-fuel intensive transportation and industry. The country wants to slash electricity-related emissions by 37% by 2030. AAIB’s bond issuance is among the largest sustainable bonds from an African bank.
EBRD’s Francis Malige said the “landmark deal” could lead to more such bonds, while boosting Egypt’s economy with long-term, hard currency funding. In 2020, Egypt listed a $750 million sovereign green bond on the London Stock Exchange; the bond attracted so much demand from investors that it secured the lowest ever rate for a five-year bond in the country.
Social goals
AAIB is committing 25% of the bond’s proceeds to financing Egypt’s small and mid-sized businesses. Other issuers in Africa have blended social and climate objectives in sustainable bond issuances, including Tanzania-based NMB Bank’s $150 million “Jamii” sustainability bond.
