Cairo: The Ministry of Finance has successfully returned to international markets and resumed its plan for international issuances of sovereign sukuk, having launched the second issuance of sovereign sukuk, compliant with Islamic Sharia principles, valued at one billion dollars in a private offering during the fiscal year 2024/2025.
According to State Information Service Egypt, this move comes despite the current economic challenges associated with escalating tensions and conflicts in the region, which have had negative implications for all markets and increased levels of uncertainty and risk.
This resumption is attributed to the significant improvement in the Egyptian economic situation and the substantial enhancement of most financial and economic indicators. The second issuance of sovereign sukuk has an annual coupon of 7.875% for a term of three years, aligning with the objectives of diversifying markets, instruments, and investors.
The issuance underscores the Ministry of Finance's ability to achieve financial targets despite changing economic and political challenges, as well as diversify funding instruments and sources in terms of markets, currencies, and investor bases, while also securing the best possible terms. This issuance follows the first issuance in February 2023, as part of the international sovereign sukuk programme, which amounts to approximately 5 billion dollars.
It is also part of the Ministry of Finance's plan to diversify funding tools, currencies, issuance markets, investor segments, extend the debt maturity, and reduce the cost of external debt, thereby lowering financing costs. Kuwait Finance House fully invested in this private offering, being one of the largest Islamic banks in the world, which enhances partnership and investment opportunities between the Egyptian and Kuwaiti sides.
The Ministry of Finance has confirmed that, as promised, it is committed to reducing the external debt of budgetary entities by approximately 1 to 2 billion dollars during the current year, with preliminary indicators suggesting the capacity to achieve these targets.