Arab African International Bank (AAIB) has issued a $500 million sustainability bond, with investments from IFC, the European Bank for Reconstruction and Development (EBRD), and British International Investment (BII), to advance Egypt’s green transition and micro, small, and medium-sized enterprises (MSMEs).
The sustainability bond is the first in Egypt – and the largest issued by a private bank in Africa – and will support green and sustainable projects in Egypt. IFC has subscribed in the bond with $300 million alongside $100 million from EBRD and $100 million from BII – with 75 percent of the bond’s proceeds allocated to green financing, such as industrial energy-efficiency, small-scale renewable energy projects, and green buildings; and 25 percent allocated for social assets including inclusive finance and MSMEs.
To support the move to a greener, climate-resilient economy, in 2023 Egypt’s government announced its aim to reduce greenhouse gas emissions by 37 percent by 2030. The sustainability bond will help Egypt advance towards this target by increasing access to finance to businesses and projects that help reduce greenhouse gas emissions or otherwise protect the environment. The bond will also help address the country’s growing financing needs for MSMEs.
The full EBRD release can be found here.