Egypt’s AAIB bank raises $500 mln in green bond

Egypt’s Arab African International Bank (AAIB) issued Africa’s largest private green bond worth $500 million to fund its sustainable development operations.

Three renowned development financial institutions: the IFC, the EBRD, and British International Investment (BII) teamed up in this issuance, subscribing to the entire bond.

The bond is also reflective of a strong commitment to supporting Egypt’s green transition and economic development.

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.

Green bonds are a type of fixed-income financial instrument designed to raise funds for projects that have positive environmental and climate benefits.

The proceeds from green bonds are exclusively used to finance or refinance projects that contribute to environmental sustainability. This includes projects related to renewable energy, energy efficiency, clean transportation, sustainable water management, and pollution prevention.