Egypt is considering swapping debt for assets and investments with several parties and international institutions, according to Finance Minister Ahmed Kouchouk on Friday.

In an interview during the World Economic Forum held in Switzerland, Kouchouk highlighted that the discussions — which have not yet been disclosed — include swapping debt for investments in clean energy and human development.

Related: Debt swaps are vital tools to push SDGs, development projects | Al Mashat

Debt swaps are a popular tool for governments, offering a way to reduce debt burdens, drive economic growth, and attract valuable investments. By converting debt into assets or strategic investments in sectors like infrastructure or clean energy, countries can foster long-term development and strengthen foreign relations as an alternative to traditional borrowing.

Egypt recently signed a debt swap agreement with Germany worth €29 million to support various developmental sectors in December, and have secured several debt swaps 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.