Algeria launched on Tuesday its first sovereign sukuk issuance, targeting 296.65 billion Algerian dinars ($2.3 billion) to fund domestic projects covering infrastructure and other sectors.
An information note published by the Treasury said the issuance forms part of a broader strategy to expand financial instruments aligned with Islamic finance principles, complementing existing financial mechanisms while offering investors Sharia-compliant options to mobilise national savings.
Proceeds from the issuance will be used to finance major public projects, particularly in infrastructure, equipment and public services, a Wednesday-dated report by the official Algeria Invest platform said.
The sukuk is structured under the Ijara-usufruct model and is backed by a portfolio of state-owned real estate assets, including administrative buildings, public facilities and land designated for construction.
Under the Ijara-usufruct structure, investors earn returns from leasing rights to a portfolio of state-owned properties while ownership remains with the government. These assets include administrative buildings, State public facilities, and land intended for construction.
The market value of the usufruct rights was assessed by the National Development Fund (CNED) and approved by the Directorate-General for National Property.
The nominal value of each sukuk certificate is set at DZD 100,000 and DZD 1 million, with a seven-year maturity. The subscription period will run for two months or until the target amount is reached.
Investors are being offered a net annual return of 6 percent, higher than traditional savings products, alongside tax exemptions and full Sharia compliance.
The offering is open to Algerian citizens, both resident and non-resident, and legal entities governed by Algerian law.
Gas-rich Algeria had planned to issue sukuk for the first time in early 2025 but postponed it to the middle of the year. The issue was again delayed but there was no explanation for the decision.
Algerian officials had said in late 2024 that key projects targeted by the sukuk issuance include infrastructure, schools, hospitals and facilities that will contribute to boosting growth and improving life quality for citizens in the country.
In October 2025, Reuters reported that Algeria plans to reduce its budget deficit by 35.5 percent to $40 billion in 2026 or 12.4 percent of GDP from $62 billion in 2025. It said the 2026 budget package projects total expenditures of over $135 billion, up from $128 billion in 2025, and $112 billion in 2024.
(Writing by N Saeed; Editing by Anoop Menon)
(anoop.menon@lseg.com)
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