The government, via the Finance Ministry, has issued Rp 1.57 trillion (US$128.74 million) worth of project-based Islamic bonds – commonly known as sukuk – to finance the development of double-track railways and the revitalization of haj boarding houses.
“The project-based sukuk are aimed at financing three projects: the construction of double-track railway lines on the second section of the Cirebon-Kroya route and from Manggarai to Bekasi, as well as the restoration of haj boarding houses,” the Finance Ministry’s director general of debt management, Robert Pakpahan, said in Jakarta on Wednesday, as quoted by Antara news agency.
The Transportation Ministry initiated the construction of the Cirebon-Kroya rail link, worth Rp 745 billion, and the Rp 626 billion Manggarai-Bekasi railway.
Meanwhile, the Rp 200 billion revitalization of haj boarding houses in Balikpapan, Jakarta, Medan and Padang was initiated by the Religious Affairs Ministry.
Robert said the sukuk had a maturity of 10 years and a coupon rate of 9 percent.
“But that depends on liquidity, economic development and global financial conditions when we issue the bonds,” he said. He added that the Finance Ministry would issue the sukuk in the second half of this year.
The sukuk being issued to finance these three infrastructure projects is part of the government’s sukuk issuance target for 2014 worth Rp 60.37 trillion. (ebf)