Ijarah Sukuk
Jualah Sukuk for Project Finance
For issuance of Jualah sukuk, government chooses a contractor for establishing a certain property with particular costs. Then, enters the first Jualah contract with the SPV as its own agent to perform required measures to finance, build and operate the property against receiving a certain fee (certain amount of money or the right to operate for a certain period). In other words, the subject of the first Jualah contract (government / SPV) would be the following up of the work, raising funds and signing all required contracts to build and operate (Engineering, Procurement, Construction and Finance / EPCF). The SPV issues Jualah sukuk and by pooling the investors’ funds and on behalf of security holders enters the second Jualah contract with the contractor which is selected by the government to establish the project and by finishing each phase of the project pays the specified fee to the contractor. So, the subject of the second Jualah would be establishment (Engineering, Procurement, Construction / EPC). Contractor, after finishing the project, delivers it to the government on behalf of the SPV, and by finishing the building period (or each phase of the building), the contractor would be the owner of the second fee (Ja’al ) and SPV would be the owner of the first fee (Ja’al). In case the fee (Ja’al) of the first Jualah contract is the right to operate, SPV takes the property from the government and delivers it to the operator (which may be the contractor). The operator pays a certain commission fee for operating the property and the revenues shall be paid to the security holders. Jualah sukuk for project finance would be in different models as follows: Operational Model of Jualah Sukuk for Project Finance against a Certain Fee (Ja’al) Government chooses the contractor for establishing a specific project with certain construction costs (for example, 400 billion Rials) and introduces the contractor to the SPV. Then the Jualah operation shall be continued as follows: 1. SPV signs the first Jualah contract with government to finance and establish the project against a certain fee (for example, 800 billion Rials). 2. SPV issues 4 billion Rials of five year Jualah sukuk at a specific profit rate (20% annual). 3. SPV pools the investors’ funds. 4. SPV signs the second Jualah sukuk with contractor to establish the project against a specific fee (for example, 400 billion Rials). 5. SPV pays the pooled funds to the contractor with respect to provisions of the contract. 6. By finishing the construction period, SPV delivers the property to the government for putting into operation and government pays the specific fee to the payment agent. 7. The payment agent (Central Securities Depository and Settlement Company / CSDI) pays the fee to the security holders.
Jualah Sukuk
Jualah sukuk is designed on the basis of Jualah contract. The issuer transfers these securities and raises funds to provide such services subject of these securities and present to the originator in form of a second Jualah contract as the investors’ agent. Bellow, we are to explain how Jualah sukuk could be applied to finance various tourism projects.
Protection of Purchasing Power of Islamic Treasury Notes
Protection of purchasing power of Islamic treasury notes is considered in paragraph 5 of Note 5 of the budget law for the year 1395 (2016 – 2017), and conforming to the Regulations Governing the Listing and Offering of Islamic Treasury Notes ratified on 9 Sep, 2016 by the SEO, these notes are registered securities transferred to the buyers at par value with a certain maturity date and by protecting the purchasing power, in order to settle the government’s due debts. The period for protecting the purchasing power of Islamic treasury notes, pursuant to the Note 1 of article 2 of the enforcement bylaw, paragraph 5 of the Note 5 of the budget law for the year 1395 (2016 – 2017), is prescribed since the date of due debts and issuance of draft until the date on which the Islamic treasury notes have been issued. It is recommended that the said period is prescribed since the date of issuance until maturity date in order to protect the purchasing power of the creditors.


 No. 13 Mollasadra Ave., Vanak Sq.,

       Tehran 1991915814,

       Islamic Republic of Iran

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