Egypt Raises $1bn Through Islamic Bonds Despite Market Turmoil
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A Khan
- . June 26, 2025
- . Update: June 27, 2025 12:29 pm
Ministry of Finance in Egypt has successfully made a strategic issue of a billion dollar bond offered as an Islamic bond in a major move that would be very successful in the alternative funding programs facing the overarching regional economy. The issuance of the sukuk is the second large step of the government toward Sharia based debt, which is part of its overall financial diversification policy.
The three-year sukuk sale comes at a competitive interest rate of 7.875percent per annum, a factor that would cultivate Egypt well in the Islamic financial trading context. Kuwait Finance house which is considered as one of the most prestigious Islamic banking companies in the world succeeded in underwriting the total placing and a sign that the economy of Egypt is moving in the right direction.
The sukuk offering will be the second-ever sukuk offering in Egyptian history after the first sovereign Islamic bond issued by Egypt back in February 2023 that made the country a newcomer in the international market of Islamic finance. The deal is part of an ambitious prospective sukuk program worth $5 billion that Egypt is offering to the growing market of Islamic investors in the Middle East and other parts of the globe.
This sukuk placement has been made possible irrespective of the geopolitical tensions experienced in most parts of the Middle East region thanks to the improved macroeconomic fundamentals in Egypt. It is worthy to note that the Ministry of Finance pointed out that having enhanced key financial indicators was the basis of tapping international Islamic capital markets at conducive terms.
The sukuk issuance structure, which is the private placement structure, provided Egypt with flexibility, and committed funds linked with a strategic regional partner. This strategy portrays the governance as a government that is smart in comprehending Islamic capital markets and conciliating with the Gulf based monetary establishments.
The sukuk strategy in Egypt shows how the country is keen on moving beyond the normal sovereign debt products and accommodating the principles of Islamic finance that suit the wants and needs of the people in the region in terms of religion.
Sukuk proceeds will finance the wider budget management agenda especially the government commitment in the current fiscal year to lower the external debt commitments of the budget related entities by about 1-2 billion dollars. Initial showings reflect that this debt cut objective is still feasible even in the troubled global economy.
Ministry officials stressed that the issuance of sukuk was an example in which Egypt can acquire favorable terms of financing and achieve the objectives of currency and investor base diversification. The plan is particularly meant to see increased average debt maturity profiles, and at the same time lower the cost of debt servicing externally.
The effective issue of sukuk boosts the credibility of Egypt finance market, and indicates its ability to access other sources of funds amidst changes of market turbulence. Such ability gives the government a greater flexibility in the choice of debt portfolio.
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