NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, April 29, 2014

Bank financing for long-term infrastructure projects is becoming less attractive under the Basel III rules. Hence the burden for financing infrastructure is expected to shift away from banks toward bond markets, which can help tap long-term institutional investors such as pension funds and insurance companies. Infrastructure projects that build tangible assets that generate revenues are consistent with the Islamic finance stricture of creating economic value; such projects are therefore appropriate for sukuk.