The Council of Ministers decided in its session held today, chaired by Prime Minister Dr. Jafar Hassan, to approve the issuance of Islamic financing Sukuk by the Greater Amman Municipality in the amount of 400 million Jordanian Dinars in the form of an Ijara contract ending with ownership, with an annual return rate of 5.5 percent for a period of 5 years.
The decision comes within a plan aimed at enhancing the efficiency of financial management, reducing costs, and taking advantage of Islamic financing opportunities available in the local market.
This issuance is the first of its kind in the Kingdom for the benefit of public institutions (municipalities); which enhances the Kingdom's presence as one of the leading international experiences in the field of Islamic finance and its applications, in line with the vision of economic modernization and its developmental goals.
Shahada confirmed that the government is working to re-engineer debt management by dealing with both aspects, represented by the debt balance and its cost, through the use of various financing tools, which contributes to alleviating financing burdens, reducing financing gaps, and controlling debt growth.
He explained that the government has been working since the first day of its formation on debt management, and for this purpose, it used Islamic Sukuk to extinguish the Eurobond bond at the beginning of 2025, in addition to concessional loans, noting that the government is also looking forward to taking advantage of concessional loans to extinguish future bonds.
He pointed out that the issuance of Islamic Sukuk for the benefit of Amman Municipality comes within the government's approach to diversify debt management tools, explaining that the total Islamic Sukuk that the government has worked on amounted to about 800 million Jordanian Dinars, in an unprecedented step.
He pointed out that the government is looking forward to using these financial tools in other sectors, including universities, without making a final decision in this regard so far, calling on various parties to take advantage of the tools available in the banking sector that help re-engineer debt costs and stressed the need for institutions to review debt cost management methods and take advantage of available financial tools, instead of relying solely on traditional borrowing, stressing that the government is ready to provide the necessary advice to take advantage of its experience in issuing Islamic Sukuk.
Minister Shahada pointed out that the government is seriously considering Islamic Sukuk as an important tool to help extinguish debts and reduce their costs through various tools, noting that the private sector has also started issuing tradable Sukuk, which is a very important step.
