Egypt is exploring affordable loans from China, Japan – minister

Egypt is exploring financing financing options that include affordable loans from China and Japan, Finance Minister Mohamed Maait said on Thursday.

The North African country is seeking to diversify its funding sources and has had discussions with some governments such as those in Japan and China on securing loans at a reasonable cost, Maait added.

Officials are looking at a “package of alternatives to try and get cheap financing,” the minister said.

For Japan, talks are ongoing over a loan of as much as $500 million that will be directed toward different areas, including environmentally friendly projects. The government is also working on getting financing from multilateral international and regional development banks and institutions, Maait noted.

Another option considered by the Egyptian government is a foray into new markets, two years after the North African country became the first in the Middle East to sell a sovereign green bond.

If conditions are favourable in the current financial year that started in July, the Finance Ministry may issue $500 million in what would be its debut panda bonds in the Chinese market and offer another $500 million of green debt, Maait said.

An additional possibility is borrowing up to $2 billion through the country’s first sukuk, or Islamic bonds, he explained.