Algeria is working on a new law to regulate its first major sovereign Islamic bonds (Sukuk) issue which aims to secure funds for its infrastructure projects, the OPEC member’s Finance Minister has said.

Laaziz Fayed was quoted by Algeria’s Aljumhuria newspaper on Wednesday as saying that the Finance Ministry would issue the Sukuk in early 2025 as part of the country’s budget which he said includes several projects in infrastructure and other sectors.

Fayed said the new bonds are part of the Ministry’s plan to diversify sources of public project finance, absorb swelling liquidity and attract as many investors as possible to fund domestic infrastructure projects without the need for borrowing or raising taxes.

“We are working to set new principles and regulations for such bonds in line with the Islamic Sharia (law),” the Minister said.

“We aim to make these bonds a safe means of investment to allow investors to make high profits…this will be possible through a package of incentives that we intend to issue including tax exemptions for Sukuk investors,” he added without making clear the value of the Sukuk to be issue.

In a report in October, Elkhabar newspaper quoted Algerian government sources as saying the Sukuk issuance would strengthen investors’ confidence in the domestic market, attract foreign capital, lessen reliance on foreign debt and boost Algeria’s financial reputation.

(Writing by Nadim Kawach; Editing by Anoop Menon) 

(anoop.menon@lseg.com)

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