Pakistan has achieved a major milestone in Islamic finance as the Ministry of Finance (MoF) successfully issued over Rs2 trillion worth of Sukuk in 2025, marking the highest-ever Sukuk issuance in a single calendar year since the introduction of Sukuk in 2008. The achievement underscores Pakistan’s accelerating shift toward Shariah-compliant financing and deepening of the Islamic capital market.

According to details shared by Khurram Shehzad, Advisor to the Finance Minister, the record issuance was executed through the Ministry’s Debt Management Office, in close collaboration with Joint Financial Advisors (JFAs). The move reflects a strategic push to diversify the government’s debt portfolio while aligning with constitutional and policy commitments to Islamic finance.

During 2025 alone, the government carried out 61 Sukuk issuances across 1-year, 3-year, 5-year, and 10-year tenors, under both Fixed Rental Rate (FRR) and Variable Rental Rate (VRR) structures. Notably, Pakistan also launched its first-ever Green Sukuk, which received an overwhelming market response and was 5.4 times oversubscribed, highlighting strong investor confidence in Shariah-compliant and sustainable instruments.

The Sukuk cashflows were backed by a diverse pool of sovereign assets, including Pakistan Railways, TDAP, National Highway Authority (NHA), Capital Development Authority (CDA), Pakistan Airports Authority (PAA), Pakistan Sports Board (PSB), and Karachi Port Trust (KPT), ensuring robust asset-based structures in line with Shariah principles.

From 2019 to 2025, Pakistan’s total Sukuk issuance has reached Rs8.7 trillion, while outstanding Sukuk now stand at Rs6.6 trillion. Overall, the country’s total outstanding Shariah-compliant government instruments have risen to Rs7.1 trillion, reflecting steady growth in Islamic debt financing.

As of December 2025, the share of Shariah-compliant instruments in the government securities portfolio has increased to 14.5 percent, up from 12.6 percent in June 2025. The Ministry of Finance has set a clear target to raise this share to 20 percent by fiscal year 2028, signaling a long-term commitment to Islamic financial reforms.

Financial experts view this achievement as a strong indicator of structural maturity in Pakistan’s Islamic capital market, supported by improved sovereign debt management, sustained investor trust, and disciplined macroeconomic policies. The growing reliance on Sukuk is also seen as a positive step toward fiscal sustainability and reduced exposure to conventional interest-based debt.

With a stabilizing macroeconomic outlook, a diversified debt strategy, and a defined roadmap for Islamic finance, Pakistan is steadily positioning itself as a regional leader in sovereign Sukuk issuance, building a more resilient, inclusive, and future-ready government securities market.