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FinMin to complete sukuk issuance of up to EGP 3 bn within a month: The Finance Ministry is gearing up to complete its first sovereign sukuk issuance of the year within the next month, with the issuance set to be around EGP 2-3 bn, a government official told EnterpriseAM. This will be Egypt’s second-ever sovereign sukuk issuance and its first to be denominated in EGP. The Finance Ministry is also looking to tap international debt markets with a USD 1.5 bn sukuk issuance during the final quarter of the current fiscal year.
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REMEMBER- Egypt’s maiden sovereign sukuk issuance in 2023 raised USD 1.5 bn and was more than 4x oversubscribed. The issuance attracted interest from over 250 global investors from markets including the Gulf and East Asia, as well as the US and Europe.
The new issuance will be part of a larger EGP 10 bn sukuk issuance, which is set to be offered in an unknown number of tranches, our source said, adding that the tranches will all be issued before the end of the current fiscal year.
More to come: The ministry is also planning to issue between USD 1-1.5 bn worth ofgreen bonds or eurobonds, according to our source. The ministry is also looking to issue its first social bonds in 4Q 2025.
ICYMI- Finance Minister Ahmed Kouchouk said late last year that the government was considering EGP 5-10 bn worth of green bond and sukuk issuances during the last two quarters of FY 2024-25. The upcoming issuance is set to be the first of the sukuk issuances Kouchouk was referring to at the time, the source told us.
IN CONTEXT- The new issuance comes as the government seeks lower domestic and international borrowing costs alongside financing for development projects at a time when the state has capped public investment at EGP 1 tn for the current fiscal year. Egypt returned to international debt markets with its first USD bond issuance in nearly two years last month, issuing USD 2 bn in five- and eight-year bonds. The absence from international debt markets came on the back of high global interest rates and domestic currency market instability, which had discouraged the issuance of USD-denominated debt on international markets.
Sukuk issuances offer several advantages for investors: “Investing in sukuk isn’t only beneficial for those who want to invest in debt instruments that are in line with Islamic shariah. They are also backed by assets, and these assets are usually connected to investments in infrastructure or public utilities. This makes them less volatile, but it also involves sharing both returns and risks, unlike in ordinary investments. For those reasons, they attract investors across the board,” economist Mona Bedair told EnterpriseAM. “They also provide Islamic banks with liquidity management tools that are more in line with Islamic shariah compared to conventional bonds and bills,” she added.
