IslamicFinance.de

The G20 group of nations' decision to examine the use of sukuk to finance infrastructure investment could eventually spur a big increase in the size of the market, Fitch Ratings says. But several significant challenges would need to be overcome first, most importantly finding a legal structure that would be acceptable to governments, investors and the sukuk's Sharia boards. One of the main uncertainties is whether sovereign issuers will be willing to directly pledge infrastructure assets to sukuk investors or accept the most common structure, known as Ijarah sukuk. Alternative structures could be found, but it would take longer to achieve and could see slower take-up, especially as innovative structures would have to be approved by a Sharia board.