Egypt to get USD 1.3 bn in climate financing from the IMF

The IMF Executive Board approved some USD 1.3 bn in climate financing to Egypt under the Resilience and Sustainability Facility, Egypt’s Finance Minister Ahmed Kouchouk said during the annual ministry Iftar on Monday. The decision comes in tandem with the board’s completion of the fourth review of its Egypt’s USD 8 bn loan program.

More than expected: The initial announcement of the climate financing agreement back in March 2024 stated that Egypt would be eligible to lock in USD 1-1.2 bn in climate financing funds.

We have an idea of what projects could receive financing: The funds are set to be directed towards climate-related projects in Egypt, especially those focused on the expansion of renewable energy, emission reduction, water projects, and combating desertification, IMF executive director and Egypt’s former finance minister Mohamed Maait told EnterpriseAM. This comes as part of the government’s efforts to address climate change, he added.

The sizes of the tranches, as well as the disbursement and repayment mechanisms, remain unknown, Maait told us, adding that they will be determined with the Egyptian government at a later stage.

Egypt is also securing financing for green projects through other means: The Finance Ministry has been planning to issue USD 1-1.5 bn worth of eurobonds or green bonds in international markets, followed by an issuance of sovereign sukuk, to take advantage of rising investor interest in Egyptian debt, a senior government official told EnterpriseAM back in January. The Madbouly government has been holding discussions with international offering advisors to identify the best options for debt issuances in the coming period, the source added.

IN OTHER DEBT WATCH NEWS-

UAE’s Aldar Investment Properties has raised USD 500 mn through a 10-year green sukuk issuance, according to a pressrelease(pdf) issued Thursday. The issuance was 7.2x oversubscribed and received USD 3.6 bn worth of orders — 39% of which came from international investors and 61% from regional ones. The sukuk was priced at 110 basis points over US Treasuries with a 5.25% coupon rate. The proceeds will go towards projects under the company’s green finance framework.

ADVISORS- JP Morgan and Standard Chartered are joint global coordinators and lead managers, and will also step in as book runners with Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Ajman Bank, Bank ABC, Dubai Islamic Bank, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, KFH Capital, Mashreq and Sharjah Islamic Bank.

Not their first: The company issued USD 500 mn 10-year green sukuks back in May 2024 — then the company’s second issuance of its kind — at 110 basis points per share over US treasuries. The issuance attracted USD 1.9 bn in orders then, and took place under Aldar’s USD 2 bn trust certificates programme.

ALSO- In January, Aldar Properties raised AED 9 bn (USD 2.45 bn) in a sustainability-linkedsyndicated senior credit facility. The facility — structured as an unsecured committed multi-tranche revolving credit — stands as the largest sustainability-linked, syndicated transaction by a real estate company in the Middle East.