Amman, Oct. 12 (Petra) — The Greater Amman Municipality’s planned
issuance of JD400 million in Islamic sukuk marks a strategic shift in
its approach to debt management and municipal financing, aimed at
reducing borrowing costs, improving financial sustainability and
freeing up resources for key development projects, Deputy City
Director for Financial Affairs Ibrahim Zyoud said.

The Cabinet, chaired by Prime Minister Jafar Hassan on Sunday,
approved the municipality’s issuance of Islamic financing sukuk worth
JD400 million under a lease-to-own (Ijarah Muntahia Bittamleek)
structure, carrying an annual return of 5.5 percent over a five-year
term.

Speaking to the Jordan News Agency (Petra), Zyoud described the
issuance as a first of its kind among municipalities and public
institutions in the Kingdom, offering an alternative to conventional
borrowing and broadening the municipality’s financing options.

He said the move would diversify funding sources and attract a wider
pool of investors, while introducing a financing model that enables
municipal and service-oriented institutions to meet development
commitments through Islamic financial instruments rather than relying
on conventional borrowing.

The issuance is intended to restructure the municipality’s financial
obligations by replacing existing high-cost financing with Islamic
sukuk. The principal will be repaid in full at the end of the
five-year term, while returns will be paid periodically, Zyoud
explained.

He said the new financing structure is expected to reduce financing
costs, ease debt-servicing pressures, improve cash flow and
strengthen the municipality’s financial position, supporting fiscal
sustainability over the medium and long term.

Proceeds from the issuance will be used to repay part of the
municipality’s existing debt, while savings from lower debt-servicing
costs will help finance and complete capital and development projects
included in its approved plans.

Priority projects include public transport development, traffic
management solutions, infrastructure upgrades, digital transformation
and environmental initiatives. The savings are also expected to
improve municipal services for residents and accelerate the
implementation of key projects across the capital.

On the wider economic impact, Zyoud said the issuance is expected to
stimulate economic activity in sectors linked to capital projects,
strengthen confidence in the financial market and help create a more
attractive environment for strategic investment.

He added that the municipality is committed to high standards of
governance and transparency by reducing existing debt-servicing costs
and directing the resulting savings towards the projects and purposes
specified in the securities prospectus.

The financing will also be subject to oversight and auditing in
accordance with Islamic Sharia principles and government accounting
standards.

//Petra//WH