Road projects: DMO to issue N250bn Sovereign Sukuk

The Debt Management Office (DMO) is set to issue another Sovereign Sukuk of N200 – N250 billion this year to finance critical road projects across the country.

Already, DMO has appointed Transaction Parties through the Open Competitive Bidding Process for the issuance of this fourth Sovereign Sukuk. The Transaction Parties and their respective roles are:

*Issuing Houses – Stanbic IBTC Capital Limited, Greenwich Merchant Bank Limited and Vetiva Capital Management Limited.

*Financial Adviser – BURAQ Capital Limited.

*Trustees – FBNQuest Trustees Limited and APEL Capital & Trust Limited

*Legal Advisers – Abdulai, Taiwo & Co. Solicitors and Tsedaqah Attorneys.

DMO said it expects a high subscription level for the Sukuk when the offer opens.

The DMO commenced the issuance of Sukuk in September 2017 as a strategic initiative to support the development of infrastructure, promote financial inclusion and deepen the domestic securities market.

Subsequent to the debut Sovereign Sukuk in 2017 in which N100 billion was raised to finance the rehabilitation and construction of 25 road projects across the six geopolitical zones, the DMO issued a Sukuk for N100 billion in 2018 and another for N162.557 billion in 2020.

The proceeds of these two Sukuk issuances were also deployed to 28 and 44 road projects, also in the six geopolitical zones.

In all, a total of N362.577 billion Sovereign Sukuk was issued between September 2017 and June 2021.

Since the debut Sovereign Sukuk in September 2017 whose benefit in terms of improved road infrastructure within and outside cities in Nigeria is clearly visible, the Sukuk has been commended as a viable instrument for financing infrastructure.

The use of Sukuk, according to DMO, has enabled timely completion of the designated projects whilst also delivering the multiplier effects associated with construction of capital projects such as roads.