Kuwait is planning to tap international debt market through conventional and shariah compliant US dollar-denominated bond issue to raise up to KD3bn ($10bn) as the oil rich Gulf state looks to plug its 2016-17 budget deficit.

Kuwait could also secure up to KD2bn by selling debt to banks and financial institutions in the domestic market, according to news agency Reuters which cited an emailed statement from Finance Minister Anas al-Saleh, who is also the deputy prime minister and acting oil minister of Kuwait.

Kuwait is latest state among the six-member economic bloc of GCC, planning to tap local and international debt markets amid continued weakness in the oil prices. Crude, the benchmark for more than half of the world’s oil, has slumped from a mid-2014 peak of more than $100 per barrel to current $50 per barrel level, affecting finances of Gulf states which rely heavily on sale of oil for revenues. Abu Dhabi and Oman have already tapped the debt markets this year. Qatar in in May also sold $9bn in Eurobonds to investors, while Saudi Arabia is speaking to banks about its debut international bond issue, which could see the kingdom securing at least $10bn.

The remainder of Kuwait’s expected KD9.5bn budget deficit for the current fiscal year, which began on April 1, will be covered by drawing down funds from the general reserve. “Most of the available scenarios suggest that oil prices will remain, for the foreseeable future, lower than the levels required (for) attaining a balanced budget,” Al-Saleh added.

For the 2015 to 2016 fiscal year, the government posted a budget deficit of KD5.5bn, lower than the KD8.2bn it had previously forecast, on account of higher production of oil and efforts to reduce current spending, he said, adding that still, the government was committed to funding capital projects tied to the national development plan and mega infrastructure schemes.

For the current fiscal year Kuwait’s budget is based on an average oil price of $35 per barrel, lower than the benchmark for the previous year of $45. The Finance Ministry is also preparing a public debt strategy for the coming five years to manage the country funding needs.

The strategy included setting up a special unit to manage public debt within the ministry. It would work in cooperation with Kuwait Investment Authority, the sovereign wealth fund, and the central bank, according to the news agency.