Egypt: Egypt Sustainable Transport and Digital Infrastructure Guarantee

approved

Egyptian government (GOE) is aiming to raise USD500 million equivalent CNY through a privately placed, three-year maturity, Sustainable-labeled bond by the end of 2023. This guaranteed bond proceeds will enable Egypt to support four infrastructure projects in the transport and digital sector which are aligned with Paris Agreement carbon-emission reduction under Egypt's Sovereign Sustainable Financing Framework (SSFF), namely: the financing of the expansion of the fiber connection for households (FTTH project). the rehabilitation of the tramway line 1 in Alexandria, the rehabilitation of Cairo Metro Line 1, the rehabilitation of Cairo Metro Line 2. In addition, this Bond will diversify the GOE's sources of financing. Due to the specificities and regulation of the market for CNY-denominated bond by foreign issuers for (also known as Panda bond market), a PDG is needed so it reaches an investment-grade rating. AIIB and AFDB aim to jointly provide a Partial Debt Guarantee for this Bond so it reaches this rating and successfully raise financing for the eligible sub-projects. The proposed AIIB Partial Debt Guarantee (PDG) is up to USD 200 million equivalent in CNY, including bond proceeds and any accrued but unpaid interest. AFDB will provide a guarantee of up to USD345 million equivalent in CNY, including bond proceeds and any accrued but unpaid interest.