Saudi eyes bonds to fund airport expansion

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 Ibrahim Alassaf has told Al Arabiya television.

"The rest of the bonds for King Abdulaziz Airport in Jeddah and King Khaled Airport in Riyadh will be issued this (coming) year," Alassaf said on Sunday.

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 SR27bn ($7.2bn) 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.