From Reuters

Kenya will issue its debut sukuk in the next financial year, not this one as some had expected, after it opted to borrow an additional $750 million from its maiden $2 billion Eurobond issued in June, its finance minister said on Monday.

Parliament is set to consider a recommendation by its finance committee to double the government’s external debt ceiling to $28 billion to fund the construction of a new railway, port, roads and power plants.

There were expectations in the market the government would issue a bond compliant with Islamic law or shariah this financial year, partly to reduce domestic borrowing and lower interest rates.

Henry Rotich, the cabinet secretary for the Treasury, said the re-opening of the Eurobond, which is expected to be completed on Wednesday, had given the government time to prepare the documentation for the sukuk issue.

“We will prepare for sukuk but for the next financial year,” he told Reuters on phone, without indicating the potential size of the bond. He said it would be issued in the financial year in the financial year ending June 2016.

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