The Structures and Application of Sukuk

One of the Islamic financial instruments for today is sukuk. Sukuk is essentially a certificate of ownership of an asset (real projects) that can be used on a large scale to finance the construction. In some countries, sukuk financing instruments has become an important state budget. At this time, some countries have become a regular issuer of sukuk, such as Malaysia, Bahrain, Brunei Darussalam, the United Arab Emirates, Qatar, Pakistan, and State of Saxony Anhalt - Germany. The issuance of sovereign sukuk are usually intended for general state general funding or to finance specific projects , such as dam construction , electrical power units , ports , airports , hospitals , and highways. Sukuk is seen as a better alternative than a debt due to, among others, contains elements of investment cooperation, sharing and engagement risk assets (real projects) are also underlying sukuk. The objective of this paper is to explain the concept of sukuk, the role of Special Purpose Vehicles (SPV), the base structure of the contract, and some sharia principle for sukuk application. The methodology of this paper is through qualitative research based on relevant literatures on sukuk. The general finding of this paper shows that sukuk has several advantages especially in liquidity management, fund rising, low risk investing and securization.