Sovereign sukuk milestone: Pakistan crosses PKR 10 trillion

Pakistan reached a sovereign sukuk milestone on Thursday as government sukuk crossed PKR 10 trillion, Finance Minister Aurangzeb said.

He said issuance of sovereign sukuk grew 113 percent from a year earlier, showing that the country’s Islamic capital market is widening.

What the sovereign sukuk milestone shows

Aurangzeb spoke at a ceremony that marked PKR 10 trillion in sovereign sukuk, along with the launch of hybrid and short-term issues. Issuance, he said, climbed from about Rs2 trillion a year earlier.

Over five years, he noted, the compound annual growth rate stood near 22 percent, against roughly Rs761 billion in 2020.

Meezan Bank hosted a gathering in Islamabad for the same achievement. Meezan Bank said the government sold PKR 4.179 trillion of sukuk from January through 31 October 2026. The previous record, set across all of 2025, was PKR 2.052 trillion, so this year’s total is already more than double. New structures, regulatory help and wider participation by financial institutions supported the rise.

New instruments behind the growth

The government has issued sukuk mostly under the Ijarah structure since 2008, which ties issuance to tangible state assets. To raise capacity, it added a hybrid structure that mixes Ijarah with Commodity Murabaha, so the same assets can support more issuance.

It also launched tradable sukuk with three and six months to maturity. Aurangzeb said these fill a long gap at the short end and help build a Shariah-compliant yield curve across maturities.

The minister said the milestone is not only about volume. It also reflects work to diversify the market and make government financing more flexible.

Foreign and retail buyers of the sovereign sukuk milestone

Aurangzeb said foreign investment in sukuk remains below expectations, even though inflows through special convertible rupee accounts into treasury bills and bonds have been positive. He urged banks, primary dealers and brokers to promote sukuk to international investors.

He also wants more retail participation through digital platforms. Individuals could invest as little as Rs5,000, he said, which would widen the investor base beyond big institutions.

Corporate plans after the sovereign sukuk milestone

The minister said the Ministry of Power has given the first mandate to the National Debt Company, which is preparing the country’s first listed sukuk. He hopes its success will set a benchmark for other firms.

A deep market needs several regulators to cooperate, he added. The Securities and Exchange Commission, the State Bank of Pakistan, the Pakistan Stock Exchange and the Central Depository Company all have roles.

Who attended

Aurangzeb attended as chief guest, and State Bank Governor Jameel Ahmad spoke as well. Khurram Schehzad, the minister’s adviser, joined, and Justice (retd) Mufti Muhammad Taqi Usmani gave the keynote.

Meezan Bank chief Dr Syed Amir Ali praised the finance ministry and the central bank. Joint financial advisers Dubai Islamic Bank Pakistan, Bank Islami Pakistan and Bank Alfalah also took part.

For now, the sovereign sukuk milestone gives Islamabad a larger Islamic financing base. Also, the sovereign sukuk milestone depends on drawing in more overseas and retail buyers.