DUBAI (Oct 28): The sukuk market has become a potential source of funding for long-term projects such as infrastructure projects, said Bank Negara Malaysia Governor Tan Sri Zeti Akhtar Aziz.

She said in recent decade, a total of US$95 billion of infrastructure sukuk has been issued by more than 10 countries.

In Asia, it is estimated that a funding of US$8.3 trillion is required for infrastructure projects up to 2020, while that for the Middle  East is about US$2 trillion.

“In Malaysia, as you can see the investment in the mass rapid transit (MRT) project is massive as it requires [huge funding encompassing] billions of ringgit (and) therefore, these projects need to be financed through the bond market, and certainly some tranches should be in sukuk,” she told reporters after participating in a dialogue session on "Sukuk Development and Financial Stability" at the 10th World Islamic Economic Forum (WIEF) today.

In her address at the dialogue, Zeti said the Islamic capital market in Malaysia has been systematically developed to ensure accessibility to investors, while ensuring the protection of their investments.

“The initiatives to develop the market are also strongly backed by legal and syariah framework, and are further supported by a robust financial infrastructure that enables Malaysia to provide a complete sukuk issuance and trading platform,” she added.

She noted that the outstanding sukuk in the Malaysian marketplace now stands at US$158 billion.

The ongoing 10th WIEF in Dubai, that is held from Oct 28 to 31, is organised by the WIEF Foundation in collaboration with the Dubai Chamber of Commerce and Industry.