The Debt Management Office (DMO) has announced that based on the documents recently received from the implementing ministry for the Road Projects being financed by the proceeds of the Sovereign Sukuk, the Federal Ministry of Power, Works and Housing is processing the release of funds to the contractors working on the roads.
It is expected that with this development, work on the roads would be further accelerated in line with the plans of the Federal Ministry of Power, Works and Housing to provide a better driving experience for motorists during the December festivities.
Based on the structure for Sukuk financing, which is required to be asset-backed and the approval received from the sole regulatory body for non-interest financial products in Nigeria – the Financial Regulatory Advisory Council of Experts (FRACE), payment to the contractors constructing and rehabilitating any of the Sukuk roads can only be made based on the achievement of milestones, which would be supported by appropriate documentation.
The introduction of the Sukuk by the federal government as a financing instrument has been endorsed by a lot of Nigerians because of the direct link between borrowing and project implementation.
Analysts said that the Sukuk is very appropriate for financing infrastructure projects.
