Egypt issued $1 billion worth of sukuk (Islamic bonds) in favor of Kuwait last Thursday, with the settlement scheduled for Tuesday, according to a government source speaking to Enterprise.

The issuance is part of a broader plan to boost Kuwaiti investments in Egypt over the course of 2024 and 2025.

The three-year sukuk will mature in June 2028 and carry an 8% coupon rate, the source added.

This move may be tied to Kuwait’s plan to convert its $4 billion in deposits at the Central Bank of Egypt into direct investments—an initiative previously reported by Enterprise and confirmed by central bank data.

The two countries reportedly agreed on the issuance around two months ago, aligning with earlier reports indicating Kuwait’s intention to shift its financial presence in Egypt from deposits to investments.

The sukuk may also be linked to the financing of the Ras Shokeir project, especially since a Gulf sovereign wealth fund — whose identity has yet to be revealed — was said to be preparing to announce a major project on Egypt’s Red Sea coast “in the coming days,” according to a senior government official who spoke to Enterprise earlier this month.

However, the source declined to confirm a direct connection between the sukuk issuance and Ras Shokeir, but noted that “several Gulf and domestic projects and deals are currently being prepared, backed by that area through ijara sukuk, and announcements will be made very soon.”