South Africa may turn to sukuk to finance infrastructure projects

With a planned $500 to $700 million ijara sukuk to be used to finance infrastructure, South Africa may just be testing the water to finance a part of the billions it foresees in future infrastructure projects directly financed by the government.  If the sukuk offering goes well, the country could become a regular issuer.  The current sukuk however, is no small feat even as the country’s bond yields hover around 12 month lows.  Both S&P and Fitch have downgraded the country within the past 6 months to BBB, two notches above junk.  

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