Kuwait is on the verge of enacting a public debt law that would enable the government to borrow for the first time since 2017, according to sources cited by Bloomberg. The proposed legislation aims to authorise the issuance of up to 20 billion Kuwaiti dinars ($65 billion) over the next 50 years.
The draft law is in advanced stages and is expected to permit the government to issue both conventional bonds and sukuk as needed. The allocation between domestic and international issuances will depend on factors such as interest rates and liquidity in Kuwaiti banks.
Kuwait’s last debt issuance occurred in March 2017, when it raised $8 billion through the sale of bonds just before the expiration of the previous debt law.
The anticipated approval of the public debt law is part of broader government efforts to enhance Kuwait’s credit rating and borrowing conditions, thereby boosting investor and creditor confidence both locally and internationally. The law is seen as a necessary reform to secure financing for capital expenditures aimed at funding development projects included in the annual budget.
The government plans to utilise the ‘public debt’ facility in phases, guided by the state’s financial requirements to cover deficits or finance development projects and influenced by prevailing economic conditions.
Kuwait’s strong financial position and low debt levels make the approval of the public debt law a strategic move to secure financing for rapidly advancing development projects.
The proposed legislation is expected to be approved by the Council of Ministers shortly, paving the way for Kuwait to re-enter the debt markets after an eight-year hiatus.
