The Ministry of Finance has confirmed that the decision to allocate a prime plot of land in the Red Sea to the ministry is aimed at leveraging it for sovereign sukuk issuance and reducing government debt.
This allocation does not involve the sale of the land, but rather its development and partial use as collateral to issue sovereign Islamic bonds. These bonds are intended to provide competitively financed resources to support the state’s general budget, a ministry press release read.
It emphasised that ownership of the land will remain entirely with the Egyptian state, represented by the Ministry of Finance and select government entities engaged in economic activity. The land used as collateral will not be transferred to any third party.
The goal is to utilise a portion of this land to generate optimal national development by entering into partnerships and transactions with state entities operating in the financial sector and with economic authorities, the ministry also explained.
This approach aims to swap part of the current debt owed by budget-dependent entities in exchange for joint investments. It is expected to reduce public debt, while also contributing to the development of the land into productive, service-oriented, tourism, and real estate projects, according to the statement.
The strategy is also expected to lower financing costs and create additional fiscal space that can be directed toward expanding social protection programmes for low-income and vulnerable groups.
Furthermore, the strategy will increase allocations for human development, particularly in the health and education sectors, thereby improving service quality and benefiting the largest possible segment of the population.
