Egypt issues Second Sovereign Sukuk Offering Worth $1 Billion
Taarek Refaat
In a strategic move to diversify its funding sources and deepen its presence in Islamic finance markets, the Egyptian Ministry of Finance has announced the successful launch of its second sovereign sukuk issuance, valued at $1 billion.
The sukuk—structured in compliance with Shariah principles—was issued as a private placement during the current fiscal year.
Full Subscription by Kuwait Finance House
According to the Ministry's official statement, the entire issuance was fully subscribed to by Kuwait Finance House (KFH). This signals growing confidence in Egypt's Islamic finance instruments and reflects successful efforts by the government to attract a broader base of international and regional investors.
The issuance is part of a broader strategy to:
Diversify funding instruments
Expand the investor base
Reach non-traditional markets beyond conventional Eurobonds
Key Details of the Sukuk
Value: $1 billion
Structure: Sovereign sukuk compliant with Islamic finance principles
Coupon (Profit Rate): 7.875% annually
Tenor: 3 years, maturing in 2028
Investor: Fully subscribed by Kuwait Finance House
Type: Private placement
Context and Long-Term Strategy
This marks Egypt's second sovereign sukuk issuance under its international sukuk program, which has a total capacity of up to $5 billion. The first issuance took place in February 2023, making Egypt one of the few African and Middle Eastern countries actively leveraging Islamic finance tools to support fiscal needs.
The move also aligns with Egypt's broader financial strategy to:
Reduce reliance on short-term external debt
Lower borrowing costs over time
Enhance Islamic finance integration into national debt instruments
Energy and Investment Partnerships Expanding
The issuance comes as Egypt continues to broaden its financial and energy partnerships, including a recently signed oil exploration agreement with a Russian firm in Egypt's Eastern Desert. These initiatives reflect the government's dual-track strategy of securing foreign investment while managing its debt portfolio prudently.
Looking Ahead
Egypt's return to the sukuk market demonstrates a measured and strategic approach to debt diversification, especially at a time when global markets are watching emerging economies with renewed scrutiny.
By anchoring its latest Islamic bond issuance with a major Gulf financial institution, Egypt is not only attracting stable funding but also reinforcing regional financial cooperation.
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