Egypt’s Ministry of Finance is setting its sights on Gulf markets, with plans to issue bonds and sukuk denominated in regional currencies like Saudi riyal and Emirati dirham as early as Q1 2024, sources revealed to Daily News Egypt.

This strategic move comes as the country continues to diversify its funding sources and tap into burgeoning investor appetite for sustainable projects.

Finance Minister Mohamed Maait underscored Egypt’s commitment to green financing, highlighting the successful issuance of the nation’s first $750m green bonds and 3.5 billion yuan-denominated Panda bonds in China. Additionally, a second Samurai bond issuance in Japan, raising 75 billion yen, further cemented Egypt’s position as a leader in environmentally conscious investment.

Maait also pointed to securing roughly $1.5bn in financing from multilateral institutions, solidifying Egypt’s dedication to tackling climate change.

Beyond green initiatives, Maait emphasized the government’s focus on leveraging alternative financing tools to combat rising costs, particularly amidst global economic headwinds. Public-private partnerships (PPPs) emerged as a key pillar in this strategy, attracting strong interest from development partners, international institutions, and financiers. The Central Unit for Public-Private Partnerships’ expertise in navigating challenges and structuring attractive projects has been instrumental in this regard.

Maait elaborated on the incentives offered to entice PPP investment, including a five-year tax exemption for strategic industrial projects, the potential to recoup up to 50% of land value and investment costs for timely project completion, and a streamlined VAT refund system within 45 days. Additionally, import duties on machinery and equipment used in industrial production are waived at the start of operations.

The Law on the Development of Medium, Small, and Micro Enterprises further sweetens the deal with tax and non-tax incentives such as simplified tax systems and reduced bookkeeping burdens for these businesses. This commitment to fostering a vibrant SME sector aligns with Egypt’s broader economic development goals.

Despite ongoing challenges, Maait affirmed the government’s unwavering support for the export sector. Since October 2019, around EGP 54 billion has been disbursed to exporting companies to settle outstanding dues. Furthermore, customs exemptions and reductions for mobile phone parts and components aim to bolster local manufacturing and position Egypt as a competitive hub for the industry.

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