Sindh looks at Dollar Sukuk in Pakistan

The Provisional Sindh government is looking to issue a dollar denominated sukuk for up to $200 million.

The planned issuance was announced by the Sindh Minister for Finance, Syed Murad Ali Shah who stated the sukuk would provide much-needed liquidity for development and infrastructure projects in the province.

“With excess liquidity in the Islamic finance markets, this is the ideal opportunity for the Sindh government to leverage some of its unencumbered assets and issue a sukuk” Mr Shah said.

“As the first-ever provincial debt issue at the provincial level, the sukuk will reduce dependence on the federal government and will set the precedent, providing viable funding alternatives for the Sindh government.” Mr Shah further added.

Pakistani Sukuk

Pakistan is the fourth largest economy of Organisation of Islamic Cooperation (OIC) countries by GDP and has a mature domestic Islamic finance sector. Amidst a stabilizing political and economic outlook, Pakistan has displayed increased interest in sukuk issuances. The Government of Pakistan issued a US dollar sukuk for $1 billion in November 2014 and last month K-Electric issued the largest corporate sukuk in Pakistan with a 7 year Rs22 billion (Rupees) issuance.