Iran Announces $877 Million Sukuk Issuance to Bridge Budget Deficit

Iran Launches Major Sukuk Offering to Strengthen Public Finances

The Iranian government has unveiled plans to issue 100 trillion rials (approximately $877 million) in Shariah-compliant sukuk bonds to address its growing budget deficit. The Debt Management Office of the Ministry of Economic Affairs and Finance will oversee the issuance, which marks the country's latest effort to leverage Islamic finance instruments for fiscal stability.

Structure and Terms of the Sukuk Offering

The bonds will utilize the Manfa'at Sukuk structure, representing investor ownership of future benefits from specific assets. With a three-year maturity period, these instruments will be backed by future tax revenues and offer investors an annual yield of 17.9%. The Central Securities Depository of Iran will facilitate semi-annual profit distributions, while the Plan and Budget Organization guarantees both principal repayment and profit payments.

Strategic Shift Toward Islamic Capital Markets

The issuance will be conducted through Iran Fara Bourse, the nation's over-the-counter securities market. This move forms part of a broader government strategy that includes plans for 380 trillion rials in Islamic securities issuance, asset sales, and foreign reserve withdrawals approved by the Supreme Council of Economic Coordination.

Financial analysts note this development reflects Iran's continued commitment to Shariah-compliant financing solutions as it navigates economic challenges. The sukuk market has become an increasingly important tool for the government to mobilize domestic capital while adhering to Islamic finance principles.