Kazimov says Azerbaijan preparing first sukuk issuance

Azerbaijan is developing the legal and regulatory framework for Islamic finance and preparing for the issuance of its first sukuk, Central Bank Governor Taleh Kazimov said at the 20th Islamic Development Bank Group Forum.

Kazimov said amendments to the Civil Code, Tax Code and financial legislation are being introduced to enable Islamic financial instruments in Azerbaijan. Given the current level of market readiness, the country plans to begin with an Islamic window model before assessing demand for a full-scale rollout.

He said two commercial banks are already testing Sharia-compliant products, including Murabaha and Mudaraba, under the supervision of the Central Bank through its Regulatory Sandbox framework.

Kazimov added that the Central Bank and the Islamic Development Bank are jointly implementing a project aimed at creating the conditions for Azerbaijan’s first sukuk issuance. The initiative includes developing a legal and regulatory framework, strengthening institutional capacity and establishing monitoring mechanisms.

He said Islamic finance could help attract foreign investment and support private sector growth, noting that its focus on real economic activity aligns closely with Azerbaijan’s sustainable development goals and ESG agenda.

Kazimov also highlighted the importance of developing human capital in Islamic finance, including training for financial institutions, supervisors, auditors and other market participants through seminars and workshops with international partners.

N.Tebrizli