Second issuance of sovereign sukuk to be launched at USD 1bn despite present challenges in view of notable improvement of economic situation

The Ministry of Finance succeeded to get back on track of international markets to resume the plan of international issuance of sovereign sukuk, as it launched the second issuance of Sharia-compatible sovereign sukuk at USD 1bn in the form of special issuance during 2024-2025 fiscal year, despite the present economic challenges related to the current conflicts in the region, which negatively affected all markets and increased uncertainty and risks; this is because of the notable improvement of Egyptian economic situation and most financial and economic indices.

 

The second issuance of sovereign sukuk came with an annual coupon at 7.875% for three years, which meets the objectives of diversification of markets, instruments and investors. This affirms the ability of the Ministry of Finance to achieve the financial objectives despite the variant economic and political challenges, as well as the diversification of finance instruments and resources in terms of markets, currencies, investors, and the achievement of best terms and conditions.

 

This issuance comes after the first issuance in February 2023, within the framework of the international program of sovereign sukuk, where the volume of such program is around USD 5bn. The issuance also comes as part of the Ministry of Finance plan to diversify finance instruments, currencies, markets of issuance, segments of investors, elongation of debt life, reduction of external debt, which will lead by turn to reduction of finance cost.

 

The Kuwaiti Finance House has entirely invested this special issuance, as it is one of the greatest Islamic banks worldwide, which enhances partnership and investment between Egypt and Kuwait.

 

The Ministry of Finance affirmed its commitment to reduce the external debt for budget bodies, by around USD 1bn to USD 2bn this year. The initial indices illustrated the ability to achieve the objectives.