Algeria has launched its first sovereign sukuk, raising approximately 296.65 billion dinars, equivalent to about $2.3 billion, to finance development projects across several strategic sectors. The issuance marks a significant milestone in the country’s efforts to diversify public financing and strengthen its financial market.
The sukuk, launched on January 27, has a maturity of seven years and offers a fixed annual return of 6%. In line with Islamic finance principles, returns will be paid to investors in the form of rent and will be fully exempt from tax, according to the Ministry of Finance.
Subscription to the sukuk is open to Algerian individuals, whether resident or non-resident, as well as to legal entities governed by Algerian law. The subscription period will remain open until the targeted amount is fully reached, the Public Treasury said.
The Islamic certificates are backed by public real estate assets, which serve as collateral under the sukuk structure. The certificates will be freely tradable between investors and may also be listed on the stock exchange when held through bank accounts.
Funds raised through the issuance will be used to finance major public projects in infrastructure, equipment, and services, contributing to Algeria’s economic and social development. Authorities said the operation also represents an important step in consolidating Islamic finance and deepening the national financial market.
In addition to diversifying state budget financing sources and reducing dependence on hydrocarbon revenues, the government aims to mobilize domestic savings. Officials estimate that nearly 10,000 billion dinars are currently circulating within the informal sector.
The sukuk issuance comes amid increasing budgetary pressure. Projections under the 2026 finance law point to a budget deficit of 12.4% of gross domestic product, while the Revenue Regulation Fund, which previously acted as a financial buffer, was fully depleted in 2024.