Pakistan Federal Cabinet Rejects Proposal to Pledge Islamabad Park for Sukuk Bond Issuance

The Federal Cabinet, on the 26th of January 2021, rejected The Ministry of Finance’s proposal to place F-9 (Fatima Jinnah) Park of Islamabad as the asset-backed guarantee for issuance of the Sukuk bond to raise USD 750 million to USD1 billion for budget financing. This announcement came just a day after the Government of Pakistan stated its decision to use the F-9 Park as a guarantee for the Sukuk facility.

The Minister of Finance and the Secretary Finance could not convince the Cabinet that this was the better option. The park has an area of 750 acres of land with an estimated value of PKR 900 billion and when launching the bond its rent will provide enough to buy out investors.

The Ministry maintains that the Islamic Sukuk bond was a cheaper mode of financing,...