Egypt’s First $500M Sustainability Bond Aims to Drive Green Transition and MSME Growth
The Arab African International Bank (AAIB) has launched Egypt’s inaugural $500 million sustainability bond, marking a significant step in advancing the country’s green transition and supporting micro, small, and medium-sized enterprises (MSMEs). This landmark initiative, the largest of its kind by a private bank in Africa, is backed by global financial institutions, including the International Finance Corporation (IFC), the European Bank for Reconstruction and Development (EBRD), and British International Investment (BII).
Focus on Green and Inclusive Growth
Seventy-five percent of the bond’s proceeds will fund green projects such as renewable energy, energy-efficient industries, and eco-friendly buildings. The remaining 25% will be directed toward social initiatives, particularly inclusive finance for MSMEs, to boost economic growth and job creation.
This bond aligns with Egypt’s 2030 climate goals, which include a 37% reduction in greenhouse gas emissions. By financing projects that lower emissions or protect the environment, the bond contributes to both environmental sustainability and economic development.
Leadership Comments
Tamer Waheed, Vice Chairman and Managing Director of AAIB, described the bond as a strategic move to integrate sustainability into the bank’s core operations.
“This achievement reflects the international financial community’s confidence in AAIB’s strength, Egypt’s investment potential, and the country’s economic resilience. By directing capital towards projects that align with ESG principles, we are ensuring responsible growth and a sustainable future,” Waheed said.
Sérgio Pimenta, IFC’s Vice President for Africa, hailed the bond as a milestone for sustainable finance in Egypt.
“This investment empowers a greener, more climate-resilient future while advancing financial inclusion. As the largest investor in this bond, IFC reaffirms its commitment to Egypt’s climate ambitions and economic growth,” Pimenta stated.
Francis Malige, EBRD’s Managing Director for Financial Institutions, emphasized the bond’s role as a benchmark for future sustainable financing.
“This landmark investment enhances capital market flows for green and social projects, setting a precedent for ingraining sustainability criteria in financial markets while strengthening economic resilience,” he commented.
BII’s Commitment to Climate Finance
Sherine Shohdy, BII’s Regional Director for North Africa, highlighted the bond’s alignment with BII’s development goals in Egypt.
“Egypt is a key market for BII, where our portfolio supports over 91,000 jobs across various sectors. This bond is a vital tool for financing the country’s transition to a net-zero, climate-resilient economy. Over the past two years, BII has committed over £1.2 billion in climate finance, and we remain steadfast in our mission to support sustainable growth,” Shohdy said.
A Milestone for Egypt’s Economy
The $500 million sustainability bond sets a new standard for financial innovation in Egypt and Africa. By blending green and social objectives, it highlights the potential for capital markets to drive environmental and economic progress. This initiative not only advances Egypt’s climate commitments but also strengthens the MSME sector, fostering long-term resilience and inclusive growth.
