Kuwait launches first local public debt issuance of 500 million dinars with one year maturity
By turning to both local and global debt markets, Kuwait is positioning itself to secure stable, diversified funding for its economic and infrastructure development goals — while maintaining fiscal discipline and reducing reliance on its sovereign reserves
In a strategic move to activate its Financing and Liquidity Law, the Ministry of Finance, in coordination with the Central Bank of Kuwait, has announced plans to issue its first local public debt instrument for the 2025/2026 fiscal year, worth 500 million dinars in bonds and Murabaha instruments with a one-year maturity.
This marks the beginning of a larger plan to raise 2 billion dinars in local debt during the current fiscal period.
Sources revealed to Al-Rai that the Central Bank has approached local banks to assess their interest and potential contributions to this first issuance.
This comes ahead of an anticipated government promotional campaign aimed at raising 3 billion dinars from international debt markets, with a focus on Asia and Europe. The international fundraising effort is part of Kuwait’s broader financial strategy to finance development projects and cover the budget deficit without drawing from the General Reserve Fund.
Preliminary estimates indicate that the expected pricing for the first tranche will range between 4.25% and 4.375%, aligning with current market conditions. Future public debt issuances are expected to carry maturities ranging from one to 10 years, allowing for flexible financing options and investor appeal.
The issuance is the first step in a well-calculated financial engineering initiative by the government. Beyond immediate funding needs, the move aims to establish a sovereign yield curve, which will serve as a benchmark for local banks and corporate bond issuances, thereby deepening the domestic capital market and improving pricing transparency.
This initiative also aligns with efforts to attract foreign investments, following the announcement that Kuwait attracted $614 million in foreign inflows in 2024.
By turning to both local and global debt markets, Kuwait is positioning itself to secure stable, diversified funding for its economic and infrastructure development goals — while maintaining fiscal discipline and reducing reliance on its sovereign reserves.
