Jordan's cabinet, led by Prime Minister Jaafar Hassan, approved Greater Amman Municipality's issuance of Islamic financing sukuk worth 400 million Jordanian dinars, Roya News reported. The instrument uses a lease-to-own contract, carries a 5.5% annual return and runs for five years.
According to Roya News, the decision is part of a plan to improve financial management efficiency, reduce costs and draw on Islamic funding options available in the local market.
The issue is the first of its kind in Jordan for public institutions, specifically municipalities, the report said. It is described as strengthening Jordan's standing as a leading international example in Islamic finance and its applications, in line with the economic modernization vision and its development goals.
The municipality prepared the project after several months of specialized economic and financial studies conducted with government institutions and the private sector, represented by Islamic banks. Amman established a company for Islamic sukuk to finance its projects under the Islamic finance sukuk law and related regulations, consistent with best practices.
