The Kazakhstan-headquartered Eurasian Development Bank (EDB) has announced plans to issue $500mn of sukuk on international markets. 

Sukuk is a Sharia-compliant financial instrument used in Islamic finance. The issuance is intended to fund projects in the Central Asian region and could potentially set a benchmark for other Central Asian countries.

The EDB has identified potential projects into which it could direct the financing and assesses that the size of Islamic financial assets in Central Asia could reach $10bn by 2030-2035. 

The development bank has established its Islamic division and is expanding collaboration with financial institutions in the Gulf Cooperation Council (GCC). This collaboration aims to promote the development of Islamic finance in Central Asia, particularly through affiliations with organisations within the Islamic Development Bank Group.

According to the EDB's statement, the global share of Islamic finance in total assets was 1% in 2022 and is experiencing rapid growth. Between 2015 and 2021, the annual average growth rate of Islamic assets worldwide was 10.5%, surpassing the 5.8% growth rate observed in traditional finance assets.

The EDB member countries in Central Asia, including Kazakhstan, Kyrgyzstan, and Tajikistan, are predominantly Muslim nations with growing demand for Sharia-compliant financing. Kazakhstan has been a regional leader in the development of Islamic finance.

The EDB, an international financial institution with a charter capital of $7bn, has invested in Eurasia for over 17 years, focusing on projects related to transport, digital systems, green energy, agriculture, manufacturing and mechanical engineering.