Egypt signs $2bn conventional, Islamic facility to finance budget deficit

Shaimaa Al-Aees
3 Min Read

Egypt’s Ministry of Finance has signed the first conventional and Islamic financing facility, worth $2bn, to finance state’s budget deficit and support local economy.

The country’s House of Representatives had previously approved the facility.

According to a Ministry of Finance statement, on Monday, the facility was closed by Emirates NBD Capital Limited, the investment-banking arm of Emirates NBD, and First Abu Dhabi Bank (FAB) as the transaction’s global coordinators, mandated lead arrangers, and book runners.

The statement added that the two entities have launched a public offering to choose a group of Islamic and conventional financers, and that the subscription coverage rate recorded 1.75 times the offering value.

This has pushed the ministry to raise the amount of finance from $1.5bn to $2bn, reflecting regional and international confidence in the stability of the Egyptian economy.

Deputy Minister of Finance for Economic Affairs Sherine ElSharkawy said the subscription was closed with the participation of a diversified mix of regional and international investors.

The main authorised regulators and the offering managers include Mashreq Bank, ABC Islamic Bank, British Standard Chartered Bank, Islamic HSBC, the Arab Banking Corporation (ABC), and the Japanese Sumitomo Mitsui Banking Corporation.

Additionally, the main authorised regulators include Abu Dhabi Islamic Bank, Al Ahli Bank of Kuwait, the Islamic Dubai Bank, the Islamic Sharjah Bank, and the Islamic Emirati Bank among others.

Emirates NDB Group CEO Fahd Abdel-Kader Al-Qassim said the subscription process’ success proves Egypt’s positive position among emerging markets, and the increased trust of investors in the country’s economy.

Al-Qassim expressed the bank’s aspiration to play an effective role in Egypt’s future financing requirements. He explained that the agreement confirms Emirates NBD’s commitment to its global strategic clients, in light of the rapidly changing market landscape and the ability to provide the best financing solutions in all forms.

Emirates NDB Group Managing Director Andy Kernz said the offering proves the Egyptian economy’s strength, and that the increased subscriptions indicate Egypt’s strong position among international and regional investors.

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