Egypt’s AAIB issues landmark $500 mln sustainability bond to promote finance
AAIB, established in 1964, is Egypt’s first multinational bank. It offers a wide range of services to retail, corporate, and SME clients across Egypt and the region.
The bond, the first of its kind in Egypt and the largest ever issued by a private bank in Africa, has attracted investments from key international partners, including the IFC, the European Bank for Reconstruction and Development (EBRD), and British International Investment (BII).
IFC is a member of the World Bank Group. It is the largest global development institution focused on the private sector in emerging markets.
The bond proceeds will be allocated to green and sustainable projects in Egypt. Seventy-five percent will go towards green financing initiatives, such as industrial energy efficiency, small-scale renewable energy projects, and green building developments. The remaining 25 percent will support social projects, including inclusive finance and MSME financing.
This move aims to bolster Egypt’s climate commitments and address the growing financial needs of MSMEs, a critical sector for economic development.
This bond issuance supports Egypt’s climate goals, notably the government’s target to reduce greenhouse gas emissions by 37 percent by 2030. The funding will provide businesses with the financial resources needed to reduce emissions and invest in environmentally sustainable practices while expanding access to capital for Egypt’s vital MSME sector.
“This milestone underscores the international financial community’s confidence in AAIB’s financial strength, Egypt’s investment potential, and the broader prospects of the Egyptian economy. This sustainability bond is not just a financial instrument but an integral part of our commitment to integrating sustainability into our core business strategy," stated Tamer Waheed, vice chairman & managing director of AAIB.
"By directing capital towards projects that advance environmental, social, and governance (ESG) goals, we are reinforcing AAIB’s leadership in financial innovation and sustainable development,” he added.
“This bond represents a major step forward in enhancing financial inclusion while unlocking the potential of sustainable finance in Egypt. As the largest investor in this groundbreaking bond, IFC is proud to support Egypt’s transition to a greener, more climate-resilient economy while contributing to the country’s climate objectives,” said Sérgio Pimenta, IFC’s vice president for Africa.
Pimenta paid a one-day visit to Egypt on Sunday, during which he announced two developments, including the $150 million financing the IFC extended to Egypt’s largest private sector bank, the Commercial International Bank (CIB).
“We are proud to invest in Egypt’s first sustainability bond, which sets a new benchmark for the country and the region. This initiative will help channel capital into green and social projects, providing long-term, hard-currency funding that will strengthen the resilience of Egypt’s economy and capital markets,” Francis Malige, EBRD’s managing director for financial institutions, highlighted.
On her side, Sherine Shohdy, BII’s regional director for North Africa, stressed that Egypt is a key market for BII. BII is the UK’s development finance institution and impact investor. BII focuses on creating sustainable, inclusive economies across Africa, Asia, and the Caribbean by investing in financial services, renewable energy, and infrastructure.
“This investment will help businesses take essential steps towards a greener future. Over the past two years, BII has committed over £1.2 billion in climate finance, and we remain committed to supporting Egypt’s transition to a net-zero, climate-resilient economy,” Shohdy explained.
The sustainability bond aligns with Egypt’s broader environmental and economic goals. It highlights the growing importance of sustainable finance in the region.