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Sun 11 Dec 2011 06:27 PM

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Saudi Arabia eyes sukuk for $7.2bn Jeddah airport

Aviation chief says Islamic bond is likely to be issued in next two months to help fund project

Saudi Arabia eyes sukuk for $7.2bn Jeddah airport
Saudi Arabia is set to issue a sukuk to help finance its new airport in Jeddah.

Saudi Arabia's General Authority for Civil Aviation (GACA) will issue a sukuk, or Islamic bond, within one or two months to help finance its new SR27bn ($7.2bn) airport in Jeddah, its president said on Al Arabiya television channel.

"We have agreed with the finance ministry to issue a sukuk which will be paid back by revenue from the Civil Aviation Authority, and it will be issued soon... I believe within a month or two," said Prince Fahd bin Abdullah.

Last year Saudi industrial conglomerate Bin Laden Group won the contracts to develop the first phase of the Jeddah airport, raising its annual capacity to 30 million passengers.

The Jeddah airport is a gateway to millions of Muslim pilgrims who visit the holy cities of Mecca and Medina. It receives around 18 million passenters a year and is expected to see an increase of up to 30 million by 2013.

Prince Fahd said he expected the airport to be complete "within three years."

Saudi Arabia is currently implementing multi-billion dollar infrastructure projects and revamping many of its airports to cater for the growing number of passengers.

Traffic at Saudi airports has reached 30 million passengers annually and is expected to double to 60 million over the next 10 years, GACA states.

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