Egypt is preparing for a new issue of Japanese Samurai bonds, marking a return to Japan’s capital markets after its last offering at the end of 2023, according to Foreign Minister Badr Abdelatty during a visit to Tokyo.
Abdelatty said the government is finalising the remaining steps for the issuance, adding that he is promoting the bonds along with other investment opportunities during the trip.
Samurai bonds are yen‑denominated securities issued in Japan by foreign governments or companies under Japanese regulations and are designed to attract Japanese investors.
Egypt launched its first Samurai bond issue in the Japanese market in March 2022, raising about $500 million, followed by a second issue of similar size in November 2023.
Mohamed Abu Basha, chief economist and head of macroeconomic research at EFG Hermes, said the purpose of issuing the bonds is to diversify the sources of Egypt’s debt. He noted that borrowing in Japanese yen typically carries lower costs than dollar‑denominated debt, easing the burden on the state budget.
He added that such issues are usually modest in size at around $500 million and come at lower interest rates compared with dollar bonds and are often backed by guarantees from international institutions.
To bolster investor confidence, the African Development Bank is extending a $400 million partial credit guarantee that covers 80 per cent of the issue. This backing is expected to help Egypt secure longer maturities and lower borrowing costs.
Proceeds from the bonds will be earmarked for green and sustainable projects, underscoring the government’s shift towards diversified and climate‑conscious financing.
An unnamed official told Al-Asharq that the transaction is part of a wider $4 billion international debt programme scheduled through the 2025-2026 financial year that also encompasses Panda bonds, green bonds, and Eurobonds.
According to Egypt’s Medium‑Term Fiscal Strategy (2026/27–2029/30), the country’s external debt-management plan is built around concessional, long‑term financing and a deliberate diversification of international instruments.
The roadmap includes sukuk (Islamic bonds), green bonds, and sustainable bonds, alongside an entry into new markets such as Asia and China. The aim is to broaden the investor base and extend the average maturity profile of Egypt’s external debt, reducing refinancing risks and stabilising costs over time.
This reflects a shift from a reliance on traditional Western markets towards a more balanced global approach, positioning Egypt to tap into pools of capital in Asia while aligning with sustainability‑linked financing trends.
Egypt returned to the international debt market in the 2024-2025 fiscal year for the first time in three years, with successful Eurobond and sukuk issuances. Last year saw a sharp drop in Egypt’s investment risk premium, falling to 271 basis points from 1,858 in December in a clear sign of rising confidence in the country’s economic outlook.
Looking ahead, the Finance Ministry aims to source at least 60 per cent of annual external borrowing from new, concessional channels to cover budgetary needs, reinforcing its strategy of lowering costs and diversifying funding
Egypt’s external debt jumped from $152.8 billion in the fourth quarter of the 2023-2024 fiscal year to $163.7 billion in the first quarter of 2025-2026, according to Central Bank of Egypt (CBE) data.
World Bank figures show Egypt faces $38.65 billion in external obligations, meaning loan repayments and interest payments, over the nine months from April through the end of 2026.
These include $12.7 billion in Gulf deposits at the CBE, which are pledged to remain until the conclusion of Egypt’s International Monetary Fund (IMF) programme.
Debt-service commitments through year‑end amount to $34 billion in principal and $4.64 billion in interest. In the first quarter alone, obligations reached $32 billion, including $13.5 billion largely in Gulf deposits, broken down into $29.75 billion in principal and $2.3 billion in interest. The country must repay $16 billion in the second quarter of 2026, about $10.6 billion in the third quarter, and $12 billion in the fourth quarter.
According to the Finance Ministry, at least 50 per cent of the proceeds from asset sales and other extraordinary revenues will be directed to debt reduction. Additional initiatives are planned to ease the debt burden over the medium term. With inflation expected to stabilise, interest rates are projected to decline, reducing debt‑service pressures.
Banking expert Hani Abou Al‑Fotouh described Egypt’s return to Samurai bonds after a three‑year absence as a clear attempt to secure cheaper financing and broaden the room for manoeuvre beyond dollar‑denominated debt.
He noted that the yen offers cost advantages, particularly given high domestic interest rates. The African Development Bank’s partial guarantee of $400 million adds weight to the issuance, making it more acceptable to cautious Japanese investors.
While the guarantee does not eliminate risk, it helps pricing and improves the appeal to funds that typically move only with precise calculations.
* A version of this article appears in print in the 11 June, 2026 edition of Al-Ahram Weekly
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