In the budget bill of the next Iranian year (to start March 21, 2014), the government has proposed that the Oil Ministry issue €9 billion worth of forex bonds or sukuk (Islamic bonds) for funding its projects.
The government has authorized the Oil Ministry to achieve the goals stipulated in the Fifth Five-Year Economic Development Plan (2010-15), IRNA reported.
According to the report, the National Iranian Oil Company is allowed to issue €5 billion worth of bonds.
It added that the share of National Iranian Gas Company , National Iranian Oil Refining and Distribution Company and the National Petrochemical Company from the total figure amounts to €1 billion, €1 billion and €2 billion respectively.
However, the permission is not granted unless the companies hand over an explanatory technical, economic, social, environmental and passive defense report to the Vice Presidency for Strategic Planning and Supervision for confirmation, it added.
The government has also proposed a plan for issuing €12.5 billion worth of forex or Sukuk participation bonds to the parliament.
Sukuk is the Arabic name for financial certificates, but commonly refers to the Islamic equivalent of bonds. Since fixed income, interest-bearing bonds are not permissible in Islam, sukuk securities are structured to comply with the Islamic law and its investment principles, which prohibits the collection and payment of interest.
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