Egypt has successfully raised RMB 3.5 billion from the China’s domestic credit market making it the first country in Africa to do so.
Egypt says proceeds from the three-year Sustainability Panda Bond which is equivalent to $478.7 million will be used for inclusive growth and green objectives under its Sovereign Sustainable Financing Framework.
“This is a historical move not just for the country but for the entire continent. We have paved the way for alternate, sustainable financing for our African neighbours and have deepened the partnership with our Chinese counterparts. It’s more than just a financing source; it’s a testimony of how important our economic and financial ties are with the Government of China,” said Dr. Mohamed Maait, Egypt Minister of Finance.
The African Development Bank (AfDB) and the Asian Infrastructure Development Bank (AIDB) provided partial credit guarantees to support the issuance, paving the way for other African countries to access fast-growing Chinese debt capital markets
Panda bonds are issued in China’s domestic capital market by foreign issuers, typically governments or corporations, and are denominated in Chinese yuan.
“This first Panda bond issuance by an African sovereign is the perfect example of how African Development Bank Regional Member countries could leverage the Bank’s AAA credit rating to penetrate new markets and mobilize sustainable financing at competitive terms from international investors,” sais Mohamed El Azizi, AfDB Director General for North Africa.
AfDB says the combined guarantees with AIDB with triple-A ratings helped crowd in investors and secured competitive terms for the transaction.
The Bank of China Limited, with support from HSBC Bank (China) Company Limited, was the lead underwriter and bookrunner.