Egypt plans to issue up to US$2 billion in eurobonds in the second half of the 2025/26 fiscal year as it seeks to diversify its financing sources, lower borrowing costs and extend debt maturities, Finance Minister Ahmed Kouchouk.
Speaking at a seminar on capital market development, Kouchouk said demand for Egypt’s international debt, particularly five-year bonds, had strengthened, giving the government room to return to global markets.
“We are seeing growing demand for five-year bonds in international debt markets,” he said, adding that the strategy aims to attract new investors, lengthen maturities and better align financing with the state’s funding needs.
Egypt last tapped international markets in January 2025, raising US$2 billion through a two-tranche eurobond sale. The deal included five- and eight-year bonds, which were priced at yields of 8.62 percent and 9.45 percent, respectively.
The government remains heavily reliant on short-term domestic borrowing to finance its budget deficit, with most local currency debt maturing in less than one year. External financing has also depended largely on bilateral and multilateral loans rather than private creditors.
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Kouchouk said authorities were working to lengthen the maturity profile of domestic debt while reducing exposure to costly external commercial borrowing. Under this approach, total eurobond issuance is expected to be capped at US$4 billion in 2026, he added.
The comments come as emerging markets face tighter global financial conditions and rising debt-servicing costs. International Monetary Fund Managing Director Kristalina Georgieva recently warned that public debt was approaching 100 perccent of global GDP, squeezing investment in areas such as education and health.
She made the remarks during a meeting with Egypt’s central bank governor, Hassan Abdalla, amid ongoing discussions over Cairo’s IMF-backed reform programme.
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The IMF Executive Board is expected to meet before the end of the first quarter of 2026 to consider the fifth and sixth reviews of Egypt’s US$8 billion Extended Fund Facility, alongside the first review of a separate US$1.3 billion loan under the Resilience and Sustainability Facility.
In mid-January, the IMF raised its 2026 economic growth forecast for Egypt to 4.7 percent from 4.5 percent, citing easing inflation, a rebound in household consumption and improved business investment supported by looser monetary policy.
Egypt has undertaken a series of economic reforms under the IMF programme, including currency devaluation, fiscal consolidation and measures to boost private sector participation, as it seeks to stabilise the economy and restore investor confidence after years of external financing pressures.
Background to Egypt’s borrowing strategy
Egypt has relied heavily on debt financing in recent years to plug persistent budget and balance-of-payments gaps, leaving the country exposed to rising global interest rates and foreign currency shortages.
The government’s debt structure remains skewed toward short-term local currency instruments, with treasury bills of less than one year accounting for a large share of domestic borrowing. This has increased rollover risks and raised financing costs, prompting authorities to seek longer maturities and a broader investor base.
Externally, Egypt has depended largely on bilateral and multilateral lenders, including the International Monetary Fund, World Bank and Gulf allies, rather than frequent market issuance. While this has helped limit exposure to volatile capital flows, it has also constrained access to diversified funding sources.
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Egypt returned to international debt markets in January 2025 with a $2 billion eurobond sale, its first in several years, signalling improved investor confidence following a sharp currency devaluation, subsidy reforms and tighter fiscal policy under an IMF-backed reform programme.
In March 2024, Egypt secured an $8 billion Extended Fund Facility from the IMF, replacing an earlier $3 billion programme, and later obtained an additional $1.3 billion loan under the Resilience and Sustainability Facility. The funding is tied to commitments on fiscal consolidation, exchange-rate flexibility, privatisation and strengthening the role of the private sector.
The IMF has said Egypt’s medium-term growth outlook is improving as inflation eases, monetary policy loosens and investment recovers. However, it has repeatedly warned that high public debt and rising debt-servicing costs remain key vulnerabilities, limiting space for social spending and development investment.
Authorities say future eurobond issuance will be calibrated to market conditions and capped to avoid a sharp rise in external commercial debt, as Egypt works to stabilise public finances and restore economic resilience.
