Egypt Daily News – Egypt has launched its second issuance of Sharia-compliant sovereign sukuk worth $1 billion, despite current global challenges, thanks to significant improvements in the country’s economic conditions.
The sukuk was issued with an annual coupon of 7.875% for a term of three years, aligning with the government’s objectives to diversify markets, financial instruments, and its investor base.
This issuance underscores the Ministry of Finance’s ability to diversify financing tools and secure favorable financial terms and targets despite economic challenges.
As previously promised, preliminary indicators confirm the Ministry of Finance’s capability to reduce external debt related to the state budget by approximately $1 to $2 billion during the current year.
The Ministry of Finance has successfully returned to international markets and resumed its international sukuk issuance plan by launching the second issuance of sovereign sukuk compliant with Islamic Sharia principles, valued at $1 billion.
It was offered as a private placement during the 2024/2025 fiscal year. This comes despite current economic challenges linked to rising regional tensions and conflicts, which have had a negative impact on global markets, increasing uncertainty and risk.
The issuance was made possible by the significant improvement in Egypt’s economic conditions and the notable progress in most financial and economic indicators.
The second sukuk issuance, offering an annual coupon of 7.875% for three years, is in line with the goals of diversifying markets, tools, and investors. It highlights the Ministry of Finance’s ability to meet financial targets despite changing economic and political conditions and to diversify funding tools and sources across markets, currencies, and the investor base while securing optimal terms.
This issuance follows the first sukuk issuance in February 2023 and is part of the international sovereign sukuk program, which has a total volume of approximately $5 billion. It also falls within the Ministry’s broader plan to diversify funding tools, issuance currencies and markets, investor segments, extend debt maturity, and reduce the cost of external debt and thus, overall financing costs.
The full investment for this private placement was made by Kuwait Finance House, one of the largest Islamic banks in the world, strengthening investment and partnership ties between Egypt and Kuwait.
The Ministry of Finance confirmed that, as promised, it is committed to reducing the external debt of the state budget by around $1 to $2 billion this year, and preliminary indicators show that these targets are achievable.
