Historic feat in Islamic finance: Pakistan issues over Rs2trn Sukuks

ISLAMABAD: Pakistan has achieved a landmark breakthrough in Islamic finance as the Ministry of Finance (MoF) set a historic record by issuing over Rs 2 trillion worth of Sukuk in 2025, the highest-ever Sukuk issuance in a single calendar year since 2008.

According to details shared by Khurram Shehzad, Advisor to the Finance Minister, the record issuance was carried out through the Ministry’s Debt Management Office, in collaboration with Joint Financial Advisors (JFAs), marking a major step in fast-tracking the country’s shift toward Shariah-compliant financing.

Total Sukuk Issuance of over Rs2 trillion.

A sukuk is an Islamic financial certificate, often described as the Shariah-compliant equivalent of a bond.

Number of Issuances: 61 across 1-Year, 3-Year, 5-Year and 10-Year tenors - FRR & VRR - Pakistan’s First Green Sukuk successfully launched; 5.4 times oversubscribed. Underlying assets for cashflows include: Pakistan Railways, TDAP, NHA, CDA, PAA, PSB, KPT

Total Sukuk Issued (2019–2025): PKR 8.7 trillion. Outstanding Sukuk: PKR 6.6 trillion. Total Outstanding Shariah-Compliant Instruments: Rs 7.1 trillion Share of Shariah-Compliant instruments in the Government Securities portfolio (Dec 2025): 14.5percent (June 2025: 12.6percent)

The Ministry of Finance has set a target to increase this share to 20percent by fiscal year 2028.

The rising share of Islamic instruments in the government’s domestic securities portfolio (domestic debt) underscores strong momentum, growing from 12.6percent in June 2025 to around 14.5percent by December 2025, clearly positioning the MoF to achieve its 20 percent Shariah-compliant debt target by FY28.

This milestone also reflects the structural deepening of Pakistan’s Islamic capital market, sustained investor confidence, and the strengthening of sovereign debt management. It underscores the MoF and its JFAs’ commitment to expanding Shariah-compliant instruments while supporting macroeconomic stability, fiscal sustainability, and long-term growth.

With a stabilizing macroeconomic outlook, disciplined debt strategy, and a clear roadmap for Islamic finance, Pakistan is building a more resilient, diversified, and future-ready government securities market.

Copyright Business Recorder, 2025