Egypt Gets Strong Demand for Debut Sovereign Green Bond

(Bloomberg) — Egypt pulled in orders for nearly five times the $750 million size of the Middle East and North Africa’s first sovereign green bond, as it pushes ahead with anti-pollution and renewable energy projects.

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The Arab world’s most populous nation sold the five-year notes at a yield of 5.25%, well inside an opening target of about 5.75%, after amassing more than $3.7 billion of investor orders, according to a person familiar with the matter who asked not to be identified because they aren’t authorized to speak publicly.

The bond forms part of Egypt’s strategy to lock-in new financing sources and broaden the country’s investor base, steps that could in turn help lower its borrowing costs. It is touting a $1.9 billion portfolio of potential green projects, including clean transportation, renewable energy and sustainable water management.

Egypt joins a growing green bond wave with Tuesday’s sale, as global investor interest in cleaner financing surges. The assets of sustainable index mutual funds and exchange-traded funds have doubled to $250 billion in the past three years, according to Morningstar.

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After a record Eurobond sale in May, Egypt is targeting as much as $7 billion in debt sales in the fiscal year that began in July. There are additional plans to offer the country’s first sukuk, or Islamic bonds, in both local and international markets.

Read More: Egypt Sells $5 Billion Eurobond in Its Largest-Ever Issuance

The nation is expected to price its $750 million green deal later on Tuesday. Citigroup Inc., Credit Agricole SA, Deutsche Bank AG and HSBC Holdings Plc arranged the sale.

(Updates with final deal terms in first and second paragraphs.)

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