\u201cThere are also various combinations of these instruments,\u201d says Robert Newman at Stephenson Harwood. \u201cThere are also property deals, for example, where there has been some Islamic finance and some other real estate financing.<\/p>\n
\u201cThe structure then tends to get more and more complicated, because sometimes you will have traditional debt as well. There might be the equity side going through an Islamic structure and then a \u2018wall\u2019 between that and the bank debt on the other side. The two parts have to be kept separate, and that of course leads to challenges and costs.<\/p>\n
\u201cThe downsides of Islamic financing are the complexity and cost of doing this compared to more traditional financing. Also, it is easier to price more traditional financing.\u201d<\/p>\n
However, once the deal is approved and agreed, the document and what it contains are commercial transactions which stand on their own feet. They are governed by and comply with the law of whatever country the deal is happening in. \u201cIt is compliant with Sharia law but it isn\u2019t governed by it; you don\u2019t have to go to a Sharia court to sort out a dispute.<\/p>\n
\u201cThere does tend to be more documents and stages to a transaction in Islamic financing. But I do think we will see it increase \u2013 especially in the financing of larger projects, which justify the extra cost and complexity.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
The main type of Islamic finance used in major asset financing is Murabaha, a cost-plus sale system. Instead of charging interest, the structure features an agreed mark-up, or charge price, over time. Another option is Ijara, a leasing contract where the rent includes a return to cover the finance. Another, sometimes more flexible, option is Mudaraba, a form of partnership financing.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[22],"tags":[],"sponsor":[],"class_list":["post-3904","post","type-post","status-publish","format-standard","hentry","category-concessions-investments"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/posts\/3904","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/comments?post=3904"}],"version-history":[{"count":0,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/posts\/3904\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/media?parent=3904"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/categories?post=3904"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/tags?post=3904"},{"taxonomy":"sponsor","embeddable":true,"href":"https:\/\/www.portstrategy.com\/coastlink\/wp-json\/wp\/v2\/sponsor?post=3904"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}