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June 29, 2022


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African Finance supports Egypt to issue large international bonds

The African Finance Corporation intends to support Egypt in issuing “large” international bonds, both by strengthening its credit position and by investing in bonds, according to Sanjeev Gupta, head of financial services at the institution during an interview with Al Sharq.

Gupta pointed out that the foundation is in talks with the Egyptian government on funding sources, especially that “it has great needs,” pointing out that the foundation is considering how to support Egypt, specifically to support the requirements of the Central Bank of foreign currency balances, given the existence of “swap programs implemented with African central banks,” stressing that this is an area in which the foundation can provide support to Egypt.

Gupta spoke about the samurai bonds issued by Egypt during October and November worth 500 million dollars, amid a shortage of foreign currency in the country.

He pointed out that these bonds were a good example of how the foundation helped the Egyptian authorities, as the Ministry of Finance advised choosing a Japanese bond to raise funding instead of resorting to issues such as the traditional “Eurobond”, given that interest rates in Japan were low.

The financial crisis facing the authorities seems to have reached a turning point last week, when the authorities signed a huge agreement with the UAE for the development of “Ras Al-Hikma”, a privileged area overlooking the Mediterranean coast of Egypt. The government called it the largest investment in the country’s history, and it enabled it to receive direct investments worth 35 billion dollars.

This agreement stimulated optimism that the cash-strapped country will overcome its economic crisis, and Egyptian dollar-denominated bonds rose during this week’s transactions, and the value of the pound rose in parallel market transactions.

Gupta pointed out that there are promising investment opportunities in Egypt, especially in the technology sectors in general and financial technology in particular, in addition to the industrial sector, stressing that the institution is considering some potential investments in the first sector.

He added that the African Finance Corporation will continue to focus on the renewable energy sector in Egypt, as “we believe that there is room for investment in infrastructure, especially with the authorities pumping a lot of money into this sector.

The foundation believes that there are “opportunities for the existence of the IPO program and the privatization of some state-owned enterprises in Egypt, and there is talk of privatization in key sectors, and we see that this is a big opportunity,” adding, “I can’t go into details, because it is very sensitive, but if everything goes well, you will see some interesting investments.

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