FILE - Ministry of Finance
CAIRO - 8 December 2022: Egypt seeks to offer sustainability bonds for the first time, at a value of $500 million, in the first half of 2023, Finance Minister Mohamed Maait said.
Maait added that consultations are currently underway with banks that will help the government promote the offering, according to AlSharq Business.
Sustainability bonds are intended to finance projects with environmental or social impact.
"Egypt is dealing with the current global challenges, with flexible financial policies that are based, in one of its tracks, on diversifying financing sources, reducing its costs, and expanding innovative financing mechanisms," Maait said during the Euromoney conference.
The minister added that this is being done, through the issuance of sustainable, blue and social bonds, sukuk, and “green samurai” bonds in Japan and “green panda” in China. This contributes to attracting new segments of investors.
In March, Egypt issued international bonds denominated in the Japanese "Samurai" yen in the Japanese market for the first time, at a value of $500 million, equivalent to about 60 billion yen.
In September 2021, it also issued $3 billion in bonds, taking advantage of lower borrowing costs before the US Federal Reserve began to gradually raise interest rates in 2022.
During the current fiscal year, Egypt aims to issue sovereign sukuk at a value of $1.5-2.5 billion, in addition to issuing green bonds, green bonds denominated in yuan, and issuing development bonds, bringing the total amount of international bonds that Egypt will issue to between $5 and $6 billion.
In the 2022-2023 budget, Egypt plans to obtain external financing of about LE 146.4 billion, compared to about the expected LE 78.4 billion in the budget of the last fiscal year, with an increase of 87 percent.
On another note, Maait said on the sidelines of the Euromoney conference that Egypt will invest about 5 percent of the reserves of the Health Insurance Authority in financial portfolios during 2023.