What Does the AFDB $345 million credit guarantee mean for Egypt?

The African Development Bank Group approved a Partial Credit Guarantee of $345 million in Renminbi (another word for Chinese Yuan) for Egypt.

This will enable Egypt to access the Panda bond market and raise approximately $500 million for financing green and social projects.

This approval allows Egypt to become the first African country to issue a Panda bond, enhancing its credit rating and attracting financing from international investors.

The Panda bond market is the Chinese domestic market where foreign entities can issue bonds denominated in Chinese yuan (Renminbi). This allows foreign entities to get funds from Chinese investors.

The bond proceeds will be used for green initiatives such as clean transportation, renewable energy, energy efficiency, sustainable water, and wastewater management, financing for MSMEs, and health services.

These sectors are in line with Egypt's Sovereign Sustainable Financing Framework (SSFF).

The Minister of International Cooperation, Dr. Rania A. Al-Mashat, welcomed the agreement as it strengthens the strategic partnership between Egypt and the African Development Bank and supports Egypt's green future.

Egypt's Minister of Finance, Dr. Mohamed Maait, expressed gratitude for the bank's ongoing support. He stressed the importance of exploring other and new markets and finance sources to be able to realize Egypt's Vision 2030 targets.

The project shows Egypt's commitment to sustainability, as demonstrated by its previous green bond issuances and the establishment of the Sovereign Sustainable Financing Framework.