Amman, Oct. 12 (Petra) – The Cabinet approved a JD400 million sukuk
(Islamic bond) issuance by the Greater Amman Municipality (GAM),
offering public institutions a new path to diversify funding,
restructure debt, and connect financing directly to productive
development projects.

Structured as a five-year Ijarah MBT (lease-to-own) arrangement with
a 5.5 percent annual return, the issue marks Jordan’s first
municipal-level Islamic financing of its kind.

The launch follows months of financial and economic feasibility
studies conducted jointly by GAM, government agencies, and Islamic
banks.

GAM established a dedicated Islamic financial firm to back the issue
and secured all regulatory approvals from the Securities Commission,
including Central Sharia Supervisory Board clearance.

The Central Bank of Jordan (CBJ) will manage the market issuance,
targeting banks, insurance companies, investment vehicles, and
retirement funds. The bonds will be listed and traded on the Amman
Stock Exchange (ASE).

Financial analysts view the transition toward sukuk as a strategic
shift away from traditional borrowing. Because sukuk are tied
directly to tangible assets and underlying projects, they reduce
debt-servicing costs, optimize cash flow, and attract ethical and
Sharia-compliant investors.

ASE CEO Mazen Wathaifi described tradable sukuk as a “vital addition”
to the domestic market.

He noted that tradable sukuk deepen capital markets and boost
liquidity by attracting institutional and retail investors, turning
stock exchanges into active drivers of project finance.

Former Finance Minister Mohammad Abu Hammour said that the decision
signals a move toward long-term capital investments.

Utilizing sukuk for municipal development alleviates fiscal strain on
traditional budgets and allows public institutions to deliver
essential projects with greater financial independence, according to
Abu Hammour.

Academic experts said that sukuk ground investment directly in real
economic activity. Omar Gharaibeh, a finance professor at Al al-Bayt
University, noted that global markets increasingly use sukuk to close
long-term funding gaps in capital-intensive sectors like transport,
energy, and infrastructure.

Mohammad Dwairi, a finance professor at Hashemite University, added
that managing capital costs within an integrated financial framework
gives public institutions the flexibility to meet ongoing obligations
while maintaining public services.

Expert consensus holds that the ultimate success of the issuance will
depend on precise feasibility studies, risk management, and rigorous
governance to preserve investor confidence and secure financial
sustainability.

//Petra// HA