Egypt Issues MENA’s First Sustainable Panda Bonds at USD 500 Million

The Egyptian Ministry of Finance has announced the issuance of first sustainable Panda bonds in the MENA region, valued at CNY 3.5 billion (USD 500 million) with a yield of 3.5% over a three-year period.

The bond issuance has garnered substantial interest from Chinese investors, with guarantees from international banks like the Asian Infrastructure Investment Bank (AIIB) and the African Development Bank (AFDB). The bonds are part of the Egyptian government’s commitment to reducing carbon emissions and promoting the use of renewable and alternative energy sources, including green hydrogen.

The Ministry of Finance stated that this issuance aims to boost bilateral cooperation and facilitate opportunities for sustainable development goals. The ministry also highlighted Egypt's financial gap of USD 6 billion to USD 8 billion for FY2023/2024, which can be addressed through the issuance of Panda bonds, which are yuan-denominated bonds from a non-Chinese issuer that are sold in China, and Samurai bonds, which are Japanese yen-denominated bonds by non-Japanese companies issued in Tokyo.

With a total external debt of USD 165.3 billion, Egypt faces a significant debt service obligation of USD 71.6 billion over the next three years, including USD 29.23 billion in 2024. The country is striving to generate USD 191 billion in annual US dollar revenues by 2026 to address its foreign assets deficit.