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The Finance Ministry plans to issue EGP 14 bn in sovereign sukuk in December, up from EGP 6 bn in November, a government source told EnterpriseAM. The increase comes after local and international banks showed strong demand for our first local sukuk issuance, with several investors requesting more offerings.
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The ministry is planning three issuances in December— one worth EGP 4 bn and two totaling EGP 10 bn. All will be ijarah-based and backed by a Ras Shukeir land now owned by the Finance Ministry. The program is expected to reach EGP 200 bn by June 2026.
Up next, the Finance Ministry will issue the second EGP 3 bn tranche of the country’s first-ever local sukuk offering tomorrow, according to our source.
REMEMBER- The first tranche of our maiden local sukuk issuance was almost 5x oversubscribed, attracting an order book of EGP 14.9 bn earlier this month. The Finance Ministry received 63 offers from banks participating in the auction but only accepted 10, covering its EGP 3 bn target.
The new sukuk issuances will push total quarterly borrowing to EGP 2.5 tn, up from EGP 2.4 tn. Treasury bills continue to dominate public debt instruments, accounting for EGP 2.0 tn, with a smaller share allocated to bonds and sukuk. The Finance Ministry raised about EGP 5 tn in local debt during the first half of the current fiscal year — exceeding the full-year domestic borrowing target of EGP 3.2 tn set out in the state budget.
Starting from the second half of the current fiscal year, sukuk offerings will become a weekly event to help reduce debt service costs in the next fiscal year. The instruments are being financed at about 7% less than conventional debt, which could save the state over EGP 50 bn for every 1 pp drop in interest payments.
Growing appetite for these instruments is expected to reshape the domestic debt market, the source said, adding that sukuk could increase the share of both local and foreign Islamic banks in public debt holdings. This could, in turn, enhance competition among lenders and contribute to lower borrowing costs.
