Azerbaijan prepares to issue Islamic financial instruments

12:02 - 22.05.2024

May 22, Fineko/ The Islamic Development Bank (IDB) is interested in issuing bonds in local currency with Azerbaijani banks to finance small and medium-sized businesses, ABC.AZ reports, quoting Baku Stock Exchange’s chairman of board Ruslan Khalilov.

"Consultations are currently underway with the IDB on the introduction of sukuk (the Islamic equivalent of bonds – a special form of financing combining the principles of Sharia law with modern financial instruments) in accordance with local legislation. A similar tool has recently been used in Kazakhstan and Uzbekistan.  

"Sukuk has a very favorable legislative framework, its formation in the country is currently ongoing, and its implementation in Azerbaijan will simplify the issuance of Islamic bonds by both IDB and other financial institutions," he said.
Khalilov added that sukuk as a hybrid instrument has the same structure as shares (or equity stakes).