RT Journal Article
SR Electronic
T1 Structured Islamic Finance Options for the<br/>Resources Sector
JF The Journal of Structured Finance
FD Institutional Investor Journals
SP 91
OP 101
DO 10.3905/jsf.2012.18.3.091
VO 18
IS 3
A1 Jason West
YR 2012
UL https://pm-research.com/content/18/3/91.abstract
AB The investment profile and particularly the horizon of traditional debt financing for projects seldom matches the returns on assets, particularly in the resources and infrastructure sectors, where assets have a lengthy construction phase before realizing a return. This mismatch in investment duration and risk–return profile is a key weakness of the Western approach to limited-recourse borrowing under project financing conventions. The motives underlying Islamic finance differ, however, from the Western approach permittinglonger-term investments and profit-sharing arrangements,subject to the strict practice of Shariáh law. This article highlights the advantages of Islamic investment practices over traditional approaches in project financing, which can potentially fill a significant gap in funding options for firms in the global resources sector.TOPICS: Developed, options, fixed income and structured finance