Egypt Raises $1 Billion by Selling Islamic Bonds to Kuwait Finance House, Marking Its Return to Global Borrowing

BY THE ARAB TODAY Jun 26, 2025

Image Credit: Forbes Middle East

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Egypt Raises $1 Billion by Selling Islamic Bonds to Kuwait Finance House, Marking Its Return to Global Borrowing

Egypt has finished its second Islamic bond sale, raising $1 billion. The three-year sukuk was sold privately to Kuwait Finance House (KFH). This marks Egypt’s return to borrowing from international markets.

Egypt Issues New Sukuk to Help Pay Debt

Egypt has issued a new sukuk (a type of Islamic bond) with an annual return of about 7.9%, according to Egypt’s state-owned Al Ahram newspaper. The money raised will be used to repay a $1.5 billion eurobond that is due this month.

Kuwait Finance House (KFH), one of the largest Islamic banks in the world, fully invested in the sukuk. This shows strong financial cooperation between Egypt and Kuwait and growing trust in Egypt’s economy.

Egypt is trying to move away from traditional loans and attract Islamic funding from financial hubs in the Middle East and Asia.

Background

This sukuk is part of Egypt’s $5 billion international sukuk program started in 2023. The program aims to extend the time Egypt has to repay its debts, lower borrowing costs, and bring in funds from new sources. The first sukuk in the program was sold in February 2023 and offered an 11% return.

IMF Talks

This new sukuk comes while Egypt is in talks with the International Monetary Fund (IMF) for a review of its $8 billion loan program. The program is currently set to end in September 2026, but it may be extended to 2027.

The IMF recently raised its forecast for Egypt’s economic growth in 2024–25 to 3.8%, thanks to better-than-expected results in the first half of the year.

Vladkova Hollar, the IMF’s mission chief for Egypt, said Egypt’s tax and customs reforms are starting to work. But she added that Egypt still needs to collect more taxes by reducing exemptions and expanding who pays.

Egypt’s government also plans to reduce its foreign debt by $1–2 billion in 2025, and early data shows they are on the right path, according to the finance ministry.