Infrastructure Financing through Islamic
Finance in the Islamic Countries
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various stakeholders to be structured. One way to resolve this problem, particularly in markets
where sukuk is relatively new, is to establish an advisory company that can assist in the
issuance of sukuk. A good example of such an institution is the Sudan Financial Services
Company Ltd. (SFSC) established by the Central Bank of Sudan (CBOS) and the Ministry of
Finance and National Economy. Among other things, SFSC provides advisory services to
develop financial products including Islamic securities in accordance with Shariah rules and
designs and executes a marketing policy for the issuance of sukuk. Most of the government
Islamic certificates in Sudan are issued by SFSC. Since issuing sukuk is complex and costly and
involves investment banks, it is suggested that a GLC similar to SFSC be established in OIC
member countries which can develop standardized templates for sukuk and advise on the
structuring and issuance of sukuk at lower costs. This will contribute to both the development
of the sukuk market and also help raise funds for infrastructure projects.
Since the size of the Islamic financial sector is relatively small, one way to raise funds is to
issue retail sukuk. Examples of retail sukuk in Malaysia and Indonesia show that the retail
sector can also be tapped into to raise funds for infrastructure projects. Retail sukuk not only
provides opportunities to retail investors to place funds in Shariah compliant assets, it can also
potentially open up new and potentially large sources of funds for infrastructure development.
Retail sukuk can also contribute to financial inclusion by providing retail investors with
opportunities to invest in alternative saving instruments. However, this would require
increasing financial literacy and using technology to deliver the retail sukuk product in a cost-
effective and efficient manner. The policy recommendations to increase the role of Islamic
capital markets in infrastructure development are outlined in Table 5.7.
Table 5. 7: Policy Recommendations for Capital Markets
No. Recommendations Specific Steps Implemented by
6.1 Market and
Infrastructure
Development
 Trading platform
 Efficient registration and
approval process
 Government and capital
markets regulatory body
6.2 Supply Side Support
for efficient issuance
of sukuk
 Establish an advisory GLC to
advise on the issuance of
sukuk
 The advisory GLC can also
provide templates for the
issue of sukuk for
infrastructure projects
 Relevant government
ministry of capital markets
regulatory body
6.3 Tap into retail
investors
 Enhance Islamic financial
literacy
 Introduce an efficient
mechanism for the
delivery/redemption of
sukuk issues
 Relevant government
ministry of capital markets
regulatory body
 Islamic Financial
institutions