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Islamic Finance Briefing - Categorized | Bonds (Sukuk), Property, Projects, Infrastructure more

Sukuk to finance projects: Allowed?

Posted on 24 February 2012

In fact sukuk are a perfect Islamic alternative to treasury bond to finance budget deficit. They work better in the public sector than in the private one. The budget in Egypt has several development projects such as roads, railroads, airports, etc. The government issues sukuk for these projects and their like as follows:
A wakalah (proxy) given by sukuk holders to the specific authority to construct the road whose cost is 2 billion Dollars; the road, say, takes 2 years to be built and then the government rents it for 10 years, a rent which ends with ownership, i.e., with payment of its cost price over this period………………………………………..Full Article: Source

 
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Laxman - who has written 19163 posts on Opalesque Islamic Finance Briefing.


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