Finance Minister: Government Sukuk Law Enhances Sovereign Financing Flexibility and Diversifies Funding Sources
Finance Minister Dr. Yaqoub Al-Rafai confirmed that the enactment of Law No. (90) of 2026 concerning Government Sukuk represents a significant step in developing Kuwait’s sovereign financing framework. This is achieved by expanding the range of financial instruments available to the state and introducing an instrument compliant with Islamic Sharia principles.
In a press statement on Sunday, Al-Rafai said the law allows for the inclusion of Sukuk within the sovereign financing structure alongside traditional debt instruments. This enhances the flexibility of managing financing needs, diversifies funding sources and the investor base both locally and internationally, and supports the state’s direction toward developing capital markets and strengthening the efficiency of financial liability management. These efforts align with fiscal sustainability targets and help maintain the strength of the state’s financial position.
For his part, Faisal Al-Muzaini, Director of the Public Debt Management Department at the Ministry of Finance, clarified in a similar statement that the law completes the necessary tools for implementing a comprehensive public debt management strategy. It enables the inclusion of Sukuk in the state’s sovereign financing structure alongside traditional debt instruments.
Al-Muzaini added that the law provides greater flexibility in managing the debt portfolio by diversifying instruments, markets, maturity tenors, and the investor base. It also enhances the ability to manage refinancing and liquidity risks, allowing for the selection of the timing, size, and structure of issuances based on the state’s financing needs and local and global market conditions.
He noted that the law provides an additional framework to capitalize on opportunities available in Islamic financing markets, thereby expanding the base of local and international investors.
Regarding the local market, he stated that issuing Government Sukuk locally would support the development of the domestic debt market and the construction of a sovereign Sukuk yield curve across different maturities. This would enhance pricing efficiency, provide a benchmark reference for issuances by companies and financial institutions, and contribute to deepening the secondary market and enhancing its liquidity levels.
He emphasized that the Ministry of Finance would adopt an institutional and well-considered approach to managing issuances, which would support building a regular and sustainable presence for Kuwait in local and international capital markets and strengthen its status as a sovereign issuer.
