The Kuwait-based Arab Investment and Export Credit Guarantee Corporation (Dhaman) has issued a Non-Honoring of Sovereign Financial Obligation (NHSO) insurance policy to cover a $500 million international commercial loan to its member country, Egypt.
The loan is provided within the framework of the decisions of the 27th climate summit held in Sharm El-Sheikh in November 2022.
Egypt had successfully closed a $500 million dual-tranche 7-year international commercial loan equally provided by Deutsche Bank AG and the Arab Banking Corporation (B.S.C.), Bahrain, benefiting from a credit insurance policy provided by Dhaman (rated A+ by S&P), said Dhaman Corporation.
This landmark deal is the first international loan market transaction benefitting from a multilateral credit-enhancement mechanism for Egypt, involving a multilateral insurer Dhaman and mobilizing the private insurance market, it added.
Abdullah Al-Sabeeh Director General Dhaman
“This transaction demonstrates Dhaman’s commitment to its message of contributing to achieving the SDGs, as well as Egypt’s commitment to the diversification of its external financing sources through blended finance solutions with strong support from both Dhaman and global private insurers. Innovative credit-enhanced solutions in favor of Member Countries are one of the pillars of Dhaman’s 2022-2026 strategic plan.”
The transaction allowed Egypt to secure favorable financing terms, materially more advantageous than those available on the international bond market, he noted.
This transaction also demonstrates Egypt’s strong ESG policy leadership and contributes to the Government’s human capital development agenda.
The proceeds will be used to cover social projects eligible under Egypt’s Sustainable Financing Framework, announced at COP27 in Sharm El-Sheikh in November 2022, including health and education budget expenditures aligned with United Nations Sustainable Development Goals 3 (good health and well-being) and 4 (quality education), Mr. Al Sabeeh added.
