Egypt Eyes Debt-for-Asset Swap to Boost Investments

January 27, 2025

(3 Minutes Read)

Egypt recently signed a debt swap agreement with Germany worth €29 million in December to support various developmental sectors and has secured several debt swaps with China and Italy throughout 2024.

According to Finance Minister Ahmed Kouchouk, Egypt is considering swapping debt for assets and investments with several parties and international institutions. In an interview during the World Economic Forum in Switzerland, 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 tool for governments to 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.

Kouchouk also pointed to Egypt’s recent deal with the UAE as one of the most successful debt-to-investment transactions. The deal helped Egypt bolster its foreign exchange reserves, reduce the budget deficit to 89% of GDP, and lower external debt by about USD 3 billion, according to previous statements from Kouchouk. As of June 2024, Egypt is expected to face an external debt of about USD 152.9 billion, the lowest level in two years.