Cairo – January 26, 2025: Egypt is looking into new debt swaps for assets and investments with several parties and international institutions, revealed Minister of Finance Ahmed Kouchouk during an interview on the sidelines of the World Economic Forum over the weekend.
Kouchouk highlighted that the discussions — which have not yet been disclosed — include swapping debt for investments in clean energy and human development.
Debt swaps are a popular strategy for governments, providing a means to alleviate debt burdens, stimulate economic growth, and secure crucial investments.
By exchanging debt for assets or targeted investments in sectors such as infrastructure and clean energy, countries can promote long-term development while enhancing foreign relations as an alternative to conventional borrowing.
In December, Egypt finalized a €29 million debt swap agreement with Germany to support various development sectors and has also arranged several similar deals with China and Italy throughout 2024.
Kouchouk also pointed to Egypt's recent deal with the UAE as one of the most successful debt-to-investment transactions. “This is a good and successful model for both parties, and we hope to repeat it,” the minister said.
In February of last year, Egypt signed an agreement with the UAE, where Abu Dhabi Developmental Holding (ADQ) acquired the rights to develop the Ras al-Hikma area for $24 billion with the aim of developing the region. In addition, $11 billion of the UAE's deposits with the Central Bank of Egypt were converted into investments in key projects.
The deal helped Egypt bolster its foreign exchange reserves, reduce the budget deficit to 89% of GDP, and lower external debt by about $3 billion, according to previous statements from Kouchouk.
Kouchouk emphasized the country’s commitment to extending the life of existing debt and reducing external debt annually through financial discipline and expanding economic activity. “We will soon announce a comprehensive debt strategy through 2030,” he added.
As of June 2024, Egypt is expected to face external debt of about $152.9 billion, the lowest level in two years.
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