The Economic Coordination Committee approved the launch of the Sukuk Islamic bonds. 200 billion to reduce the debt of the circle.
The liberation of Sukuk after a year and a half will not only facilitate the obligations of the electricity sector, but also give Islamic banks the opportunity to invest their deposits to obtain margins and profits.
As a result, this Sukuk will be based on Ijarah mode with underlying assets of power distribution companies and other energy-related assets.
Sukuk Worth (Islamic bonds) Rs. 200 Billion To Reduce Circular Debt With Govt Approves
The government will sell these assets to Islamic banks and issue ownership shares (Sukuk) and Islamic banks and Islamic banking windows, as investors will reimburse these assets to the government on land. The funds raised under Sukuk will be used by the government to pay its debts of circular debt.
In addition, the central bank will include the Sukuk modules, including the period and the rates of profit.
The last Sukuk was issued in June 2017 by the previous government. Since then, the deposits of Islamic banks have mobilized at an impressive rate, but banks lack investment options based on Sharia in the country.
Sukuk’s winning rates are currently expected to be higher than a few years ago. Not only banks, but also their customers can get a good return on their investments.
Ahmed Ali Siddiqui, Director of Central Excellence in Islamic Finance at the IBA, said the Sukuk issue is a good option for the government to lift the Sharia Compensation Funding System to alleviate the debt problem, which greatly affects measure to the energy sector and the economy
However, the government needs to improve the efficiency of the electricity sector by improving theft, line losses and improved recovery after the problem of the circular debt has been resolved, he added.
The circular debt in the electricity sector has risen to a large Rs. 1.4 billion. The Sukuk issue will pause to ease the debt burden, but the government and the power plant should plan another to withdraw.
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