The first cross-border Islamic financing of an independent
power project (IPP) creates a new source of liquidity for
public-private partnerships (PPP), particularly across the
Middle East and North Africa.
The funding of Morocco’s $2.6 billion Safi
power plant overcame incompatibilities between shariah
principles and the build-operate-transfer (BOT) structures that
are typically used for IPPs and PPPs.
between these models had prevented large-scale Islamic
financings of these projects. But the structure used in Safi
solved this problem, for the benefit of the project and the
industry at large.
looking at these projects now have a new source of liquidity;
it presents a very significant shift in the market," said
Qudeer Latif, head of Clifford Chance’s global
Islamic finance practice who advised the sponsors.
Safi’s financial close follows a wave of sukuk
offerings by non-traditional issuers and marks the next step in
Islamic finance’s expansion. But its...