OPEC oil producer Algeria is considering issuing sovereign Islamic bonds to support its 2005 budget and ensure a stable source of finance for major projects.

The Arabic language daily Elkhabar on Friday quoted government sources as saying key projects targeted by the sukuk issuance cover infrastructure, schools, hospitals and facilities that will contribute to boosting growth and improving life quality for citizens in the North African Arab nation.

“The issuance of sovereign Sukuk is one of the main procedures that will be undertaken by the government in the 2025 budget…this will allow companies and individuals to contribute to funding the country’s infrastructure and utilities,” the paper said.

It quoted the sources as saying such a move would also strengthen investors’ confidence in the domestic market, attract foreign capital, lessen reliance on foreign debt and boost Algeria’s financial reputation.

“A key advantage of issuing Sukuk is that it will ensure stable finance for large projects in infrastructure, including roads, schools, hospitals, public utilities and other sectors…this will surely support sustainable development and provide a large number of jobs for citizens…this in turn will bolster Algeria’s ability to face challenges.”

(Writing by Nadim Kawach; Editing by Anoop Menon)

(anoop.menon@lseg.com)

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