The EDB has already established a steering committee to oversee the development of Islamic financing and engaged an international consultant. The Islamic Development Bank is also providing support in advancing this initiative.
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The Eurasian Development Bank (EDB) plans to introduce Islamic financing instruments by mid-2025, according to Deputy Chairman of the Management Board Ruslan Dalenov, speaking at a press conference on Thursday, The Caspian Post reports citing Interfax International.
The EDB is exploring new avenues to expand its product portfolio, with Islamic financing emerging as a key focus, Dalenov said. The bank believes that implementing these tools could attract an additional $0.5-1 billion in annual investments to Central Asian countries from international markets.
The EDB has already established a steering committee to oversee the development of Islamic financing and engaged an international consultant. The Islamic Development Bank is also providing support in advancing this initiative.
"As an international financial institution, the EDB is uniquely positioned to offer both conventional and Islamic financing. The introduction of new products by the bank will boost the economy by attracting fresh investments. Central Asian countries could tap into funds from Persian Gulf markets, while businesses gain opportunities to secure financing for their projects. Financing projects based on Islamic principles and issuing sukuk at an institutional level will set a strong benchmark for local businesses and foreign investors alike," Dalenov said.
Last year, the EDB announced plans to issue $500 million in sukuk to fund projects in Central Asia, and those plans remain active.
"Sukuk are funds specifically allocated for certain projects. To roll out Islamic financing, we first need to get all the necessary regulatory frameworks in place, which we're working on right now. We're planning to kick off with a small pilot project soon to get a handle on the principles of Islamic financing. Once that's done and we've shown it works, we'll showcase our capabilities to Middle Eastern investors and move forward with a full sukuk issuance, likely next year," Dalenov said.
EDB Management Board Chairman Nikolai Podguzov emphasized the dynamic growth of the Islamic finance market and its potential in Central Asia.
"We're gearing up to launch one or two pilot projects in Islamic finance in 2025, with funding of up to $10 million. These initiatives will lay the groundwork for expanding this sector further. As pioneers in the region, we're excited to lead the way and hope that governments and financial institutions in our member countries will partner with us to build strong momentum," Podguzov said.
The Eurasian Development Bank is an international development institution with $7 billion in charter capital. Its shareholders include Russia, Kazakhstan, Belarus, Armenia, Kyrgyzstan, and Tajikistan, with Uzbekistan currently finalizing its accession process.
