Ministry of Energy raises Rs200 bn through 'Pakistan Energy Sukuk'

ISLAMABAD: The Ministry of Energy has raised a sum of Rs200 billion through ‘Pakistan Energy Sukuk’ to resolve the country’s spiraling circular debt.

According to a statement issued by a private bank, the sukuk was issued through Power Holding Private Limited, a company entirely owned by the government and is a Shariah-compliant instrument.

The funds to be raised through Islamic banks would be used to ease out the debt ailing the entire energy sector, including oil and gas supplies, distribution companies, the Water and Power Development Authority and power producers.

The statement said a consortium of Islamic banks led by Meezan Bank Limited helped structure the sukuk. Besides, it said, the bank was acting as the investment agent and trustee of the bond.

The State Bank of Pakistan has declared the financing a statutory liquidity ratio (SLR) eligible product for all banks in the country.

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The sukuk is asset-based and comprises of the assets of power distribution companies and is based on the Ijarah or Islamic leasing structure and has a 10-year maturity with semi-annual rental payment.

The statement said the bond will be listed in the Pakistan Stock Exchange and a large category of investors will be eligible to invest in it.

“The sukuk will provide much-needed liquidity to the energy sector and help the government to resolve the circular debt crisis.”