The Finance Ministry is looking to secure USD 1.5-2 bn in fresh loans by 4Q 2023, Finance Minister Mohamed Maait told A sharq Busines s in an interview. This includes a planned USD 500 mn CNY-denominated panda bond issuance and a second JPY-denominated samurai issuance worth USD 500 mn.

This target has tempered somewhat from July, when the minister said the government was targeting USD 3 bn in fresh debt raises before the end of the year.

Remember: Egypt has only tapped the international debt markets once since March 2022 after the knock-on effects of the war in Ukraine and tighter global financial conditions all but locked us out of the international debt markets and raised concerns about Egypt’s debt sustainability.

Progress on panda issuance next week? The Asian Infrastructure Investment Bank(AIIB) is expected to approve ins. coverage worth USD 230 mn for our panda bond issuance in a meeting in Cairo on 21 September, Maait told the news outlet. The African Development Bank(AfDB) has said it will provide USD 345 mn in ins. coverage for the issuance. The money will be used to fund sustainable development projects.

Refresher: The government is facing a USD 17 bn external financing gap between 2023 and 2026, according to the IMF, which it is trying to fill via a mixture of state asset sales, new concessional financing from multilateral lenders, higher tourism revenues, and increasing exports, as well as the USD 3 bn IMF loan. The country’s external debt bill rose to a record USD 165.4 bn by the end of March 2023

1H 2023 was expensive for debt repayments: The government spent USD 25.5 bn on debt servicing costs during the first half of the year, Maait said in an interview with the state MENA news agency yesterday.

Putting this in perspective: The state paid off USD 52 bn in principal and interest across the entire 2021-22 and 2022-23 fiscal years, the minister said.

Things don’t let up in the coming months and years: The government has another USD 15.1 bn in short- and long-term debt repayments during the second half of this year, followed by another USD 46.3 bn in medium- and long-term repayments during 2024 and 2025, according to the most recently-available central bank figures (pdf).

Tags: