AAIB Launches $500 Million Sustainability Bond to Support Egypt’s Green Transition and MSMEs

Arab African International Bank (AAIB) issued Egypt’s first-ever $500 million sustainability bond, marking a major milestone in the country’s green finance efforts. The bond, which has attracted investments from the International Finance Corporation (IFC), the European Bank for Reconstruction and Development (EBRD), and British International Investment (BII), aims to support Egypt’s transition to a greener economy and provide funding for micro, small, and medium-sized enterprises (MSMEs).

The bond represents a significant achievement in Egypt’s sustainable finance landscape. It is Egypt's first sustainability bond and the largest ever issued by a private bank in Africa. AAIB will allocate 75% of the funds to green projects, such as energy efficiency, renewable energy, and green buildings. The remaining 25% will be directed toward social assets, particularly inclusive finance and MSME development.

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Driving Egypt’s Green and Social Projects

The $500 million bond will fund projects supporting Egypt's green goals, including reducing greenhouse gas emissions by 37% by 2030. The bond’s proceeds will help businesses and initiatives that mitigate climate change and promote environmental protection. The bond targets green and social investments to address Egypt's sustainable development needs and support the financial challenges of MSMEs.

Tamer Waheed, Vice Chairman and Managing Director of AAIB said, “This bond is more than just a financial instrument; It is a strategic extension of our core business model, designed to seamlessly integrate sustainability into our business strategy."

He added, "We believe that responsible growth is crucial to create a sustainable future for generations to come. We are ensuring that AAIB remains at the forefront of both financial innovation and environmental stewardship by directing capital toward projects that advance ESG.”

Francis Malige, Managing Director for Financial Institutions at EBRD, called the investment a benchmark for future sustainability bond issuances. “This landmark investment will increase capital market flows toward green and social projects, and demonstrates the importance of ingraining green and social criteria in capital markets transactions," said Malige.

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A Milestone for Egypt’s Sustainable Finance Market

The issuance of this sustainability bond marks a significant step in Egypt’s journey toward a more sustainable and climate-resilient economy. By tapping international financial markets, AAIB has unlocked new funding sources to tackle Egypt's environmental and social challenges.