Egypt has strategically assigned a vast 174 km² coastal tract along the Red Sea to the Finance Ministry, marking a bold step in its plan to issue up to $2 billion in sovereign sukuk by 2025, Reuters confirms.
This innovative move leverages state-owned land — not sold — as the asset base for Sharia-compliant bonds, offering investors real property rather than debt obligations.
Mirroring last year’s Ras Al-Hekma success with a $35 billion Mediterranean coast deal with the UAE, Egypt is reinforcing its financial innovation drive. Officials are quietly courting similar Gulf investments from Saudi Arabia, Qatar, and Kuwait to sustain economic momentum. Notably, this Red Sea localization covers areas from Ras Shukheir to Ras Ghamisa, ensuring state interests remain intact — especially in zones with military significance.
Asset-backed sukuk tap into a growing market of Gulf-region Sharia-conscious investors, offering a collateral-backed, low-risk opportunity while preserving liquidity for domestic priorities.
Sukuks are gaining global traction as Egypt diversifies away from conventional debt. They appeal to Gulf-based investment funds that favor secure and ethical financial instruments — potentially stabilizing Egypt’s debt dynamics and attracting steady capital inflow.
Dr. Mona Negm, a Cairo-based sovereign debt analyst, observes: “By pledging physical land instead of liquidating assets, Egypt is signalling both fiscal responsibility and innovation. It’s not just about raising funds — it’s about preserving economic sovereignty while building investor trust.”
Economic strategist Ahmed Samir adds: “The question now is execution. Transparent use of sukuk proceeds and project delivery will be critical to maintain investor confidence.”
This allocation builds on Egypt’s broader asset-optimization strategy, fitting neatly within its quoted plan to issue $2 billion Sukuk in 2025. While details on the Red Sea tract’s intended use are sparse, expectations point to tourism infrastructure, clean energy projects, or logistics hubs — all sectors aligned with regional development goals.
As Egypt prepares to issue its sukuk, global investors will scrutinize clarity on jurisdictions, replicating frameworks used in UAE’s Ras El-Hikma bonds. The Finance Ministry is expected to roll out legal and regulatory frameworks by mid-2025.
If executed transparently, this sukuk could reduce Egypt’s reliance on volatile external loans, anchor inflationary swings, and bolster confidence among international banks and asset managers considering Egypt as a strategic entry point into Africa and the Middle East.
Egypt’s strategic use of Red Sea property to collateralize sukuk reflects financial ingenuity under pressure — a test case for how emerging economies can navigate debt stress through Islamic finance innovation. Success hinges on transparent governance, regulatory certification, and careful investment allocation.
