Pakistan govt decides to mortgage airports, highways to issue Sukuk bonds

• Federal Cabinet decides to issue Sukuk bonds, take loans by mortgaging government assets
• Islamabad, Lahore and Multan airports and M3 and  to be mortgaged.
• Information Minister Fawad Chaudhry says cabinet approved proposal of floating Sukuk bonds with objective to promote Islamic banking industry. 

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ISLAMABAD: The Pakistan government will be mortgaging the country's major airports and road network and issuing Sukuk bonds, Federal Information Minister Fawad Chaudhry announced after a cabinet meeting on Tuesday.

The summary to mortgage government assets for large-scale borrowing through issuance of Sukuk bonds was approved by the federal cabinet.

The information minister said the cabinet approved the proposal of floating Sukuk bond with the objective to promote Islamic banking industry.

Read more: Pakistan’s Eurobonds oversubscribed two times: report

According to the summary, Sukuk bonds will be issued and loans will be taken out, keeping Islamabad Expressway, Islamabad-Peshawar Motorway, Pinid Bhattia-Lahore motorway section, and airports of Lahore, Islamabad and Multan as collateral.

According to sources, it will be possible to get a loan at a lower interest rate than other sources by mortgaging government assets.

On January 26, the federal cabinet had rejected a plan to mortgage the f-9 park in Islamabad and had given instructions to prepare a mortgage plan for the 244-acre Islamabad Club.

According to sources, the bureaucracy has now added major airports and motorways and the Islamabad Expressway to the list instead of the Islamabad Club.

Read more: Pakistan raises $2.5 billion through Sukuk, Eurobond