RIYADH: Egypt has become the first country in the Middle East and North Africa region to introduce so-called panda bonds in the Chinese financial market, valued at 3.5 billion yuan ($479 million). In a statement, the country’s Minister of Finance Mohamed Maait said that these fixed-income securities have a low interest rate of 3.5 percent annually for three years and are considered more competitive than international dollar equivalents. Panda bonds are denominated in Chinese yuan but issued by foreign entities. Maait noted that they are backed by credit guarantees from several international financial institutions, including the Asian Infrastructure Investment Bank and the African Development Bank. The North African country’s decision to issue the bonds coincides with a fourfold increase in foreign debt over the past eight years. This surge in borrowing has led to a substantial expansion of the nation’s repayment obligations and prompted many conventional investors to withdraw. According to data from Egypt’s central bank, there is $11.76 billion in medium- and long-term debt due in the second half of 2023, including a $500 million eurobond maturing on Nov. 20, and $14.60 billion in the first half of 2024. In September, Egypt arranged a $1.3 billion currency swap with the UAE, and in August, the Egyptian cabinet approved the issuance of five-year samurai bonds worth $500 million, denominated in Japanese currency. Moreover, in February, Egypt raised $1.5 billion in three-year Islamic bonds, known as sukuk, at a yield of 11 percent. Maait said the latest move will strengthen Egypt’s relationship with China and contribute to sustainable development goals. He claimed the move aligns with the financing framework outlined by his country’s sovereign wealth fund during the UN Climate Summit, also known as COP27, held in Sharm El-Sheikh last year. Egypt aims to reduce carbon emissions by promoting the use of renewable and alternative energy sources, including green hydrogen, as part of its National Climate Change Strategy 2050. Earlier this month, the finance minister noted that Egypt wants to increase the electricity supply from renewable energy sources to 42 percent by 2035. Furthermore, he added that the country is committed to boosting green initiatives to represent 50 percent of the government’s total investments in the upcoming fiscal year.