IFC to invest $605 mln for climate finance
The announcement comes as a part of a high-level one-day visit the IFC’s Vice President for Africa, Sérgio Pimenta, paid to Egypt on Sunday to highlight the corporation’s commitment to supporting the country’s economic development by strengthening the private sector's participation in the economy.
During his visit, Pimenta met with senior Egyptian officials, including Prime Minister Mostafa Madbouly, Minister of Planning and Economic Development Rania Al-Mashat, and the Governor of the Central Bank of Egypt (CBE) Hassan Abdalla.
Pimenta signed agreements for three key projects, which collectively focus on promoting sustainable development, driving financial inclusion, and supporting green growth initiatives in the country.
IFC will invest $300 million in Egypt's first-ever sustainability bond, issued by the Arab African International Bank (AAIB). This bond marks the most significant issuance by a private bank in Africa. This investment is part of a $500 million bond, with the European Bank for Reconstruction and Development (EBRD) and British International Investment (BII) each contributing $100 million.
The bond will allocate 75 percent of its proceeds to green projects, including industrial energy efficiency, renewable energy initiatives, and green building developments. The remaining 25 percent will fund social projects, including financial inclusion efforts and support for MSMEs.
IFC will also provide a $155 million sustainability-linked loan (SLL) to Orascom Development Egypt (ORHD) to support the company’s green tourism initiatives in El Gouna along the Red Sea. This loan will enable ORHD to significantly improve energy efficiency and reduce water consumption at its resorts, cutting energy usage by up to 50 percent from non-renewable sources and reducing water consumption by at least 20 percent. These improvements align with Egypt’s broader climate goals of reducing greenhouse gas emissions.
A $150 million loan will be extended to the Commercial International Bank (CIB) to enhance its capital base and expand its support for MSMEs across Egypt. The funding will help CIB finance small businesses, including women-owned, which are crucial for job creation and economic growth. The investment also aims to reduce the gender financing gap and foster inclusive economic development.