The issuance will include a $700 million 3.5-year sukuk with a 6.375 percent yield maturing in 2029 and an $800 million 7-year sukuk with a 7.950 percent yield maturing in 2032.
The combined deal carries an average financing cost of 7.2 percent for a weighted maturity of 5.25 years, below the current 7.5 percent yield on Egypt’s five-year Eurobonds in the secondary market.
According to the ministry, the 3.5-year tranche was priced approximately 20 basis points lower than comparable secondary market bonds, while the 7-year tranche was priced 35 basis points lower, reflecting favourable investor pricing.
The ministry emphasized that the issuance supports its broader debt management strategy, which aims to diversify funding tools, expand the investor base, lower borrowing costs, and extend debt maturities, while maintaining steady progress in reducing external debt on a sustainable annual basis.
Sukuk are Islamic financial certificates, similar to bonds in conventional finance, but structured to comply with Sharia (Islamic law), which prohibits charging or paying interest.
Instead of paying interest, sukuk holders receive returns generated from an underlying asset, project, or investment.
Essentially, investors have ownership, or partial ownership, of a tangible asset, usufruct, or service, and returns are tied to the performance of that asset.
As Egypt targets the lowest debt level in its history by 2030, the government seeks to diversify its financing resources, including by adopting several types of debt tools.
An International Monetary Fund (IMF) mission is expected to arrive in Cairo this fall for the discussions regarding the completion of the fifth and sixth reviews of the current $8 billion Extended Fund Facility (EFF) loan programme.
Under the country's new five-year Narrative for Economic Development, the government is targeting annual reductions in external debt of $1 billion to $ 2 billion.
Earlier this year, the Finance Ministry issued its second sovereign sukuk, a $1 billion private placement during the fiscal year 2024/2025, which ended in June 2025. The first sukuk was issued in February 2023, valued at $1.5 billion.
Global sukuk volumes are expected to surpass $1 trillion in outstanding debt by 2025, underscoring the instrument’s growing significance in debt capital markets across Organization of Islamic Cooperation (OIC) members and emerging markets, according to Fitch Ratings data.
Sukuk accounted for 12 percent of all USD-denominated emerging market debt issued in 2024, excluding China, and will remain a key financing tool.
Fitch projects a supportive funding environment as the US Federal Reserve is expected to cut rates to 3.5 percent by the fourth quarter of 2025, but cautioned that issuers’ credit strength will continue to determine market access.
Short link: