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Saudi Arabia to issue bonds for airport construction projects

An earlier sukuk raised 15 billion riyals

Gulf News

Dubai: Saudi Arabia’s government will issue bonds next year backed by the kingdom’s ministry of finance to fund construction work at airports in Riyadh and Jeddah, Finance Minister Ebrahim Al Assaf told Al Arabiya television on Sunday.

“The rest of the bonds for King Abdul Aziz Airport in Jeddah and King Khalid Airport in Riyadh will be issued this [coming] year,” Al Assaf said.

The kingdom’s General Authority for Civil Aviation (GACA) said in January it planned to issue a second sukuk, or Islamic bond, at the end of 2012 to help fund its 27 billion riyal ($7.2 billion) airport in Jeddah.

A first sukuk, launched earlier this year and fully guaranteed by the Saudi Ministry of Finance, raised 15 billion riyals to help fund the Jeddah airport development.

Last year, industrial conglomerate Saudi Bin Laden Group won the contracts to develop the first phase of the Jeddah airport, raising its annual capacity to 30 million passengers.

Saudi Arabia is currently investing in multi-billion dollar infrastructure projects and revamping many of its airports to cater to a growing number of passengers.