Pakistan explores Sukuk issuance, Panda bonds and innovative financing instruments as the government seeks to reduce short-term borrowing costs and extend debt maturities.

ISLAMABAD: Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb has discussed potential financing opportunities with a delegation from Sharjah Islamic Bank on the sidelines of the World Bank Group–IMF Annual Meetings 2026 in Bangkok, Thailand.

The discussions focused on Pakistan’s economic progress, financing strategy and opportunities to strengthen cooperation with the UAE-based Islamic financial institution.

Aurangzeb highlighted improvements in Pakistan’s fiscal and external-sector indicators, stronger foreign exchange reserves, sovereign credit rating upgrades and progress under the International Monetary Fund (IMF) programme.

The two sides explored prospective Sukuk issuance, rupee-denominated dollar-settled instruments, further Panda bond issuance and the potential tokenisation of Eurobonds to diversify financing sources.

The finance minister emphasised the need to replace costly short-term debt, extend repayment maturities and reduce concentrations of debt repayments without increasing overall external debt. Discussions also covered financing backed by the Multilateral Investment Guarantee Agency (MIGA), amid rising global funding costs.

The Sharjah Islamic Bank delegation reaffirmed its support for Pakistan and expressed readiness to participate in a Sukuk issuance.

Aurangzeb also highlighted investment opportunities in refinery upgrades, privatisation of power distribution companies and airport outsourcing.

Both sides discussed developing domestic capital-market benchmarks through issuances by financial institutions and expanding financing for businesses, small and medium-sized enterprises (SMEs) and the agriculture sector.

The engagement reflects Pakistan’s efforts to broaden its financing options, attract investment and improve debt management while supporting economic growth.