The government is set to raise Tk11,100 crore through two sukuk issues over the next two weeks, including Bangladesh’s first short-term Islamic bond, as it expands the use of Shariah-compliant financing for public infrastructure projects.
According to Bangladesh Bank, auctions for the two sukuk instruments will be held on 22 June and 28 June.
The larger of the two issues is a Tk5,600 crore five-year sukuk backed by the Cyclone Amphan and Flood Damage Rural Infrastructure Rehabilitation Project (CAFDRIRP). The auction is scheduled for 22 June, and investors will receive an annual rental rate of 9.75 percent.
The proceeds will be used to finance the rehabilitation of roads and other rural infrastructure damaged by Cyclone Amphan and excessive rainfall in affected areas.
Six days later, on 28 June, Bangladesh Bank will auction a Tk5,500 crore sukuk linked to the Important Rural Infrastructures Development Project on Priority Basis-2 (IRIDP-2), one of the government’s major rural infrastructure programmes.
The issue carries a maturity of 364 days, making it the first short-term sukuk introduced in Bangladesh.
Bangladesh Bank has not yet announced the annual rental rate for the instrument.
The two issues come as the government increasingly relies on sukuk as an alternative financing source alongside conventional treasury bills, treasury bonds and bank borrowing.
The upcoming auctions follow a series of sovereign sukuk issuances in recent years that have been used to finance priority projects in agriculture, rural development, safe water supply and other public infrastructure initiatives.
