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Azerbaijan prepares legal framework for issuance of Islamic bonds for the first time

06 October 2025 10:38 (UTC +04:00)

A legal and regulatory framework is being developed in Azerbaijan for the implementation of Islamic bonds – sukuk, APA-Economics reports.

The project will be carried out by the Islamic Development Bank Institute (IsDBI) through an Islamic finance grant, based on a request from the Central Bank of Azerbaijan (CBA).

Within the framework of the project, a legislative base regulating the issuance of sukuk and other Islamic finance products in Azerbaijan will be developed, the capacity of financial institutions in risk management will be strengthened, a monitoring mechanism will be established to track the development of Islamic finance, and ultimately, the country’s first sukuk issuance will be carried out.

Within the framework of the project, the current state of Azerbaijan's capital market will be assessed, and a benchmark study will be conducted based on the experiences of countries such as Malaysia, Indonesia, Bahrain, the UAE, Kazakhstan, Türkiye, and Saudi Arabia. Subsequently, a National Sukuk Framework, as well as Shariah and corporate governance regulations, will be developed. The implementation of these measures will take place over a 15-month period.

It has been noted that this initiative, by enabling the issuance of Islamic bonds in Azerbaijan’s financial sector for the first time, will help increase capital inflows, expand the investor base, and facilitate the financing of infrastructure projects.