On the morning of October 21, I had the privilege of opening the markets at the London Stock Exchange, marking the issuance of the latest benchmark Euro Green Sukuk of the Islamic Development Bank (IsDB). The moment served as a fitting prelude to the 2025 Global Sukuk Summit, held at one of the world’s leading financial centres.
The symbolism could not be clearer: Sukuk have moved from the margins of Islamic finance into mainstream global capital markets, where the world’s savings meet the world’s funding needs.
Over the past two decades, the Sukuk market has matured and accelerated at a rapid pace, surpassing $1trn in outstanding volume in 2025. This growth reflects a structural shift in investor preferences towards instruments that combine transparency, resilience and responsible engagement with the real economy.
Asset creation lies at the heart of the Sukuk asset class. SSA and corporate issuers are using Sukuk to mobilize financing for a wide spectrum of economic activities — from transport and telecommunication networks to hospitals and schools. This approach embeds discipline, curbs the excesses that exacerbated past debt crises and better aligns incentives between issuers and investors.
Far from being exotic or opaque, Sukuk structures ensure that underlying assets are identifiable, risks are disclosed, and operations adhere to ethical and responsible finance principles. In practice, their cash flows, documentation and disclosures are seamlessly compatible with the established frameworks of conventional debt capital markets. The key distinction is clarity on the use of proceeds — a feature that provides investors with an additional layer of assurance. This transparency has broadened investor interest well beyond Muslim-majority jurisdictions, extending today across Europe, North America and other major markets.
For issuers, credibility is paramount. At the IsDB, we have long championed innovative financing tools that respond to the evolving needs of our member countries while contributing to sustainable global development. Sukuk have been central to this effort. Since 2003, the bank has issued more than $55bn in Sukuk while consistently maintaining a AAA rating from the major international agencies. This track record anchors pricing, enhances liquidity and sets reference points for other issuers seeking to access Islamic capital markets.
The London market opening underscored another important reality: the evolution of Sukuk is no longer a regional story but one of global integration. Today, central banks, pension funds, asset managers and several multilateral development banks on every continent hold Sukuk in their portfolios. Each successful issuance adds to the product’s familiarity and acceptance and strengthens market confidence.
Sukuk are no longer a niche alternative. They are now a complementary pillar of global capital markets. However, for Sukuk to fully realize their potential in global finance, the path forward calls for a more robust and innovative market ecosystem.
First, standardization and clarity. Predictable structures, harmonized documentation and transparent governance can reduce friction for cross-border investors and ensure legal certainty. Standardisation does not imply rigidity; it ensures that variations never undermine the confidence of existing holders.
Second, liquidity and market depth. While primary issuance has grown strongly, secondary markets remain underdeveloped. The next phase should focus on market-making frameworks, efficient repo eligibility, benchmark curves across key tenors and broader index inclusion — allowing investors to enter and exit positions with ease and confidence.
Third, innovation with purpose. Green, social and sustainability Sukuk can help close financing gaps to address development challenges, climate adaptation and resilient infrastructure, especially in emerging markets and least-developed countries.
Issuers in Asia and the Gulf region have already demonstrated the potential of Sukuk to broaden participation and diversify funding — and Africa is rapidly following suit — with many sovereign and subnational issuers taking this path to mobilise resources for projects aligned with sustainability goals. And the opportunity is not confined to traditional hubs or projects: Sukuk can serve as a viable financing alternative for emerging capital-intensive sectors such as artificial intelligence.
Digital issuance platforms and tokenized settlement systems can also help reduce costs and expand investor reach, as long as safeguards evolve in step. Innovation should serve inclusion and integrity, not outrun them.
At the IsDB, our commitment is clear: we will continue to finance the future sustainably. We will continue to set benchmarks in the market, support member and non-member countries in building local Sukuk ecosystems, and work alongside regulators, rating agencies and investors to ensure Sukuk remain predictable, investable and impactful.
Markets are at their best when they reflect real needs and real opportunities. The next chapter of Sukuk is therefore not only about instruments and indices, it is ultimately about promoting growth, resilience, dignity and shared prosperity.
The Islamic Development Bank is a AAA-rated multilateral development bank serving 57 member countries and promoting sustainable development.