UPDATED: Egypt completes second $1bln sovereign sukuk issuance amid regional tensions - Economy

Al-Ahram Weekly

13 hours ago

Egypt's Ministry of Finance has completed its second sovereign sukuk issuance, returning to international markets with a $1 billion Shariah-compliant offering via private placement during the current 2024/25 fiscal year, the ministry said in a statement on Wednesday.
The issuance was executed despite persistent economic headwinds. These heightened geopolitical tensions have increased market volatility and global risk aversion.
The statement noted that the successful placement was supported by improvements in Egypt's macroeconomic indicators and financial conditions.
The sukuk carries a three-year tenor and offers an annual coupon of 7.875 percent. It forms part of the ministry's broader strategy to diversify funding tools, access new markets, and expand the investor base. The ministry highlighted the move as evidence of its ability to meet financial targets despite ongoing political and economic challenges.
This second issuance follows Egypt's inaugural sovereign sukuk in February 2023, part of a $5 billion international sukuk programme. The new offering supports the ministry's goals of extending debt maturities, lowering the cost of external borrowing, and tapping into new pools of capital across different currencies, markets, and investor profiles.
Kuwait Finance House is fully subscribed to private placement. One of the world's largest Islamic financial institutions, its participation underscores deepening financial ties between Egypt and Kuwait. It reflects growing confidence in Egypt's economic outlook.
The ministry reaffirmed its commitment to reducing foreign debt stock on the state budget by $1–2 billion in 2025. Preliminary indicators suggest the government remains on track to meet that target.
Egypt prioritizes diversifying its funding sources beyond traditional debt instruments, seeking to attract Islamic capital from financial centres across the Middle East and Asia.
The issuance is expected to help boost foreign currency reserves and support ongoing efforts to narrow the country's funding gap and manage the balance of payments. With plans to raise $2 billion in sukuk by 2025, the programme is central to Egypt's broader fiscal strategy to close deficits and improve debt sustainability.
Negotiations are still underway with the International Monetary Fund on the fifth review of Egypt's $8 billion Extended Fund Facility (EFF). Officials expect the programme may be extended to 2027—beyond the current end date of September 2026—amid the impact of global and regional disruptions.
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