BAKU, Azerbaijan, June 17. Azerbaijan could see
the first sukuk issuance of up to $500 million by 2030, reveals the
latest report by the IsDB Group.


“We project that by 2030 (5-year projection), a debut sukuk
issuance in Azerbaijan in the range of USD 500 million could
reasonably take place as well, given its good sovereign credit
profile and existing fiscal headroom. One key qualitative
assumption is that the ecosystem factors fall into place (e.g.
enabling regulatory support, legal amendments or reforms, etc),”
says the report of the Islamic Development Bank Institute (IsDBI)
and the International Islamic Trade Finance Corporation (ITFC)
titled “Islamic Finance in Azerbaijan: Breaking New Ground”
launched during the IsDB Annual Meetings in Baku.


Moreover, the IsDBI and ITFC also project that as Azerbaijan’s
overall debt and overall Islamic finance markets grow, there could
probably be capacity for subsequent issuances, such that subsequent
issuances reach the USD 1.5 billion range by 2035 (10-year
projection).


“Compared with the total conventional debt issuances in
Azerbaijan, which we projected to grow from to 3.4 billion in 2025
to USD 8.8 billion by 2035, sukuk are projected to make up the
equivalent of 9% of total conventional debt issuances in Azerbaijan
by 2030, and 17% by 2035. This growth trajectory seems reasonable
given the experience of other markets,” the report says.







As for the methodology, to project out the potential for sukuk
in Azerbaijan for 2030 and 2035, the IsDBI and ITFC looked at
actual historical examples of sukuk issuances in emerging Islamic
finance markets, as well as debuts by well-established Islamic
finance markets or growing hubs in non-OIC markets.


“For emerging Islamic finance markets, a debut issuance was
typically in the USD 500 million range. Some examples include debut
issuances by Pakistan (USD 600 million), Oman (USD 520 million),
Indonesia (USD 500 million), and Maldives (USD 200 million).
Additionally, for well-established Islamic finance markets or
growing hubs in non-OIC markets, debut issuances were higher,
typically in the USD 1 billion - USD 1.5 billion range. Some
examples of include debut issuances by Türkiye (USD 1.5 billion),
Egypt (USD 1.5 billion), the Philippines (USD 1 billion), and Hong
Kong (USD 1 billion). Together, these eight country comparables
helped triangulate rationally for sukuk potential in Azerbaijan. We
also projected the overall debt issuance market in Azerbaijan to
2035 to provide context, using 2025 total debt issuance and applied
a formula that assumed 10% year on year growth,” the report
reads.