The Egyptian government is tapping its existing $4bn triple-tranche Eurobond and could raise as much as $2bn in new financing, according to sources familiar with the plans.

The final price and size of the tap will be announced today on 24 May by the Ministry of Finance. Initial price thoughts on $1.75bn trance maturing in January 2022 is in the area of 5.60 per cent, while the thoughts for $1bn tranche maturing in 2027 and $1.25bn trance maturing in 2047 are 6.58 per cent and 8.15 per cent, respectively, the sources said.

France’s BNP Paribas is the Joint lead manager on the deal. US’ Citi and JPMorgan and France’s Natixis are also working on the transaction.

Cairo launched a triple-tranche bond to raise $4bn earlier in 2017. The bond was twice the size of the funding target given when it started investor meetings in mid-January.

The senior unsecured five-, 10- and 30-year bonds were issued under the Egypt’s global medium-term note programme. Egypt paid investors 6.125 per cent for $1.75bn note maturing on 31 January 2022. The $1bn 10-year tranche offered 7.5 per cent, while the 30-year $1.25bn issue offered 8.5 per cent interest.

Egypt’s Finance Minister Amr el-Garhy on 30 April said that the government could tap the international debt market to raise $1.5-$2bn through sovereign offering within weeks.

Egypt’s cabinet on 19 April approved raising the limit of the maximum amount of dollar bonds the country could issue on international markets by $2bn. The ceiling of international dollar issuances to fixed income investors was raised from $5bn.

Egypt’s Ministry of Finance is trying to secure additional funding in the wake of rising interest rates in the domestic debt market and hope to shore up the balance of cash reserves at the country’s central bank.

The Central Bank of Egypt (CBE) has also raised key lending and borrowing rates, the first such move since it aggressively hiked them by 300 points in early November, following the flotation the Egyptian pound. The central bank increased both rates by approximately 200 basis points following a Monetary Policy committee (MPC) meeting on 22 May. Overnight deposit rate was increased to 16.75 per cent from 14.75 per cent, and the overnight lending rate to 17.75 from 15.75 per cent.

Egypt has been seeking to diversify its funding options and has mainly relied on loans and foreign grants, especially, from its oil-rich allies Saudi Arabia, The UAE and Kuwait in the GCC. The country has agreed a $12bn loan programme from the International Monetary Fund (IMF) to support plans for sweeping economic reforms. However, it still suffers from dollar shortage, which has affected its ability to import goods.

The government, earlier in April, also announced plans to issue a $1bn sukuk by the end of the current financial year, according to a Ministry for Public Treasury statement at the time.

The Egyptian central bank in November broke away its dollar peg and floated Egyptian pound, which it hopes will alleviate the currency crisis it has been facing.