MSbuild does not expand environment variables

I am using MSBuild to create a solution file from the command line. In it, the path to the vcxproj file is set by the environment variable FOO at% FOO% \ ProjName.vcxproj

When I open sln in the IDE, I discover and load the project. When I use msbuild from the command line (on the same machine) I get the error:

The Project File "C:\Blah\Blah\%FOO%\ProjName.vcxproj" was not found,

      

        
        
        
      

    

On the same command line

echo %FOO%  

      

        
        
        
      

    

Gives me a properly expanded path.