The Egyptian government has issued sustainable Samurai bonds worth 80 billion yen (around $500 million), backed by a partial credit guarantee from the African Development Bank, as Egypt seeks to expand its financing channels to meet foreign currency needs.
The issuance is split into two tranches of five and ten years, in line with efforts to diversify external financing sources and broaden the investor base, according to a Monday statement by the bank.
Egypt faces external debt service that stands at about $29 billion in 2026.
The most recent international bond issuance came in May, when the government sold $1 billion in dollar-denominated bonds with an eight-year maturity, marking its first external borrowing operation since the outbreak of the Iran war.
According to the statement, the proceeds from the Samurai bonds will be fully directed toward projects in healthcare, education, renewable energy, energy efficiency, climate adaptation, water and sanitation, digital infrastructure, and inclusive socioeconomic development.
Samurai bonds are long-term borrowing instruments denominated in yen and issued to investors in Japan by foreign entities seeking financing in the local currency.
Egypt first entered the Samurai bond market in March 2022, when the Ministry of Finance issued bonds worth 60 billion Japanese yen at a 0.8% yield, before announcing the implementation of a second issuance in November 2023 worth the equivalent of about $500 million, with a 1.5% yield and a five-year maturity.
The statement noted that the latest issuance comes amid heightened geopolitical uncertainty and volatility in global financial markets, reinforcing the need for diversified and longer-term funding sources.
Experts say diversifying external financing sources through instruments such as Samurai bonds could help Egypt reduce its future reliance on loans from international institutions, particularly as its current IMF program is expected to end in 2026 and amid expectations of lower global interest rates in the coming years.
