Amman, April 5 (Petra) -- The Greater Amman Municipality (GAM) announced on Sunday a strategic plan to restructure its debt of approximately JD1 billion ($1.4 billion) by converting it into investment opportunities through the issuance of Islamic bonds, or Sukuk.
The move aims to bolster financial sustainability and reduce debt-servicing costs by leveraging the municipality’s real estate and investment assets.
In a statement, GAM said the restructuring would be implemented across three tranches: an initial issuance of JD400 million, followed by two subsequent phases of JD300 million each.
The municipality explained that its previous reliance on traditional borrowing was driven by the need to fund essential land acquisitions for development projects and road infrastructure. It also cited the financial pressures imposed by the COVID-19 pandemic as a key factor in maintaining essential public services during the crisis.
According to the statement, the transition to Islamic finance follows specialized studies and extensive consultations. The plan has received Cabinet approval, with officials highlighting its potential to improve public debt management and enhance the city's investment profile.
GAM, which operates as a non-profit service institution, emphasized that any financial savings generated by the restructuring would be reinvested directly into improving municipal services and supporting sustainable urban development projects for the capital’s residents.
The first tranche of JD400 million is expected to be launched shortly as the primary stage of the rollout, with the remaining tranches to follow as part of a long-term plan to modernize the municipality’s financial capabilities.
//Petra// AF
