Sukuk as an Infrastructure-Financing Tool

Abstract

Although many studies have stressed potential benefits of using Sukuk for funding large-scale infrastructure projects, several technical, legal, and political obstacles that are encountered by new sovereign and corporate issuers, investors, and Shari'ah boards remain largely unexplored. This research evaluates the opportunities, barriers, and potential risks for future Sukuk issuances that are proposed for funding large-scale infrastructure projects in developing countries. A purposive sampling method was employed to conduct in-depth interviews with several Islamic finance experts in support of the qualitative data analysis. Using the maximal variation and snowball approach, the researcher identifies the key challenges for large-scale Sukuk issuances and provides useful interpretations that can contribute to the expansion of Sukuk structures for a wider international investor base.