Major role for Sukuk in funding GCC infrastructure projects 

(MENAFN - Kuwait News Agency (KUNA)) Sukuk are expected to play a major role in providing necessary funds for infrastructure projects in the GCC over the next 10 years as they and other countries in Asia look to carry out projects worth a total USD 8 trillion, a report said on Friday.

Infrastructure spending has been one of the key drivers for economic growth in the GCC over the past decade and sukuk have played a crucial role in this sector over the past decade, with proceeds raised from issuances being utilised for both low and high profile projects, said the report conducted by Islamic bank, Kuwait Finance House Research.

The very nature of sukuk combined with their flexibility allows them to be structured in various different ways which has attracted corporate and sovereign entities to choose Islamic bonds as a viable alternative financing instrument.

The cumulative infrastructure projects and funding needs in both the GCC and Asian regions are expected to support the sukuk market in 2012 and 2013, given that an important dimension of the infrastructure investments has centred on efforts to turn the region into an internationally significant transportation hub.

Large investments in airports and sea ports have gone hand in hand with new rail and road projects which are transforming the leading urban centres of the region but also creating in increasingly GCC-wide network of modern surface transportation.

The most ambitious expression of this is provided by the on-going efforts to establish a regional railway system within the GCC member states.
Malaysia has dominated the sector over recent years with a total of USD 49.

9 billion used for infrastructure projects between 2001 and August 2012, followed by Saudi Arabia with USD 6.5 billion being issued over the same period.