The Government of Iran has announced plans to issue 100 trillion rials (approximately US$877 million) in Sukuk bonds to help finance its budget deficit through Shariah-compliant capital market instruments. The issuance will be carried out following a request from the Debt Management Office of the Ministry of Economic Affairs and Finance, according to Gholamreza Abu Torabi, as reported by the Securities and Exchange News Agency (SENA). The office is responsible for managing government debt, monitoring outstanding liabilities, and utilizing government securities to finance budgetary shortfalls.
The bonds will be issued in the form of Manfa’at Sukuk, an Islamic financial instrument that represents ownership of the future benefits or services generated by specific assets. The Sukuk will have a three-year maturity and will be backed by future government tax revenues. Investors will receive an annual yield of 17.9%, with returns paid every six months through the Central Securities Depository of Iran. The Plan and Budget Organization will guarantee the repayment of both the principal amount and the periodic profit payments.
The issuance will be managed through Iran Fara Bourse, the country’s over-the-counter securities market, and forms part of the government’s broader strategy to raise funds while complying with Islamic finance principles. The initiative is intended to support public finances amid increasing fiscal pressures and to provide an alternative source of funding through the domestic capital market.
Earlier, the Ministry of Economic Affairs and Finance announced plans to issue 380 trillion rials in Islamic financial securities as part of efforts to reduce the country’s widening budget deficit. In addition, the Supreme Council of Economic Coordination has approved several financing measures, including the sale of surplus state assets, withdrawals from foreign exchange reserves, borrowing from the National Development Fund of Iran (NDFI), and the issuance of additional Islamic financial securities.
These measures highlight Iran’s continued reliance on Sukuk and other Shariah-compliant financing instruments to strengthen fiscal stability, diversify government funding sources, and address budgetary challenges in a sustainable manner.