Ministry of Finance Prepares to Issue Syria’s First Sovereign Sukuk

Sukuk are a key component of modern global debt and capital markets. They are Islamic financing instruments backed by real assets, such as real estate or investment projects, in which the holder is a partner in the asset and its returns, not a creditor awaiting interest payments. In Syria, sovereign Sukuk are strategic financing instruments that offer non-inflationary sources of government financing. But, their effectiveness in the current Syrian context, in my view, hinges on three complementary conditions:

1. A stable legal and regulatory environment: Reduces uncertainty and limits the risk premium required by investors.

2. Directing proceeds toward capital expenditure: Financing revenue-generating development projects rather than current expenditures, thereby supporting the sustainability of public finances and broader confidence in the economy.

3.  A fair pricing mechanism for Financial Instruments: Anchored by an active money market, a reliable benchmark yield curve, and a diversified investor base.