The market is not yet ready for sukuk with tenors of several decades, said Doug Bitcon, director of Debt Capital Markets at Rasmala Investment Bank at the Sukuk Congress Mena.

“We don’t hold assets more than 10 years, which is probably similar to a lot of sukuk investors out there. There often are asset/liability mismatches, so putting longer sukuk in the market wouldn’t really help the situation, I think. The only reason to pick long-dated sukuk would be if interest rates were lower [making the yield on sukuk more attractive].”

Bitcon added that regional investors looking for the long term, such as pension funds, would be needed to create a market for longer-dated sukuk. “Ultimately, pension fund industry development here would have to help finance the long-term funding of infrastructure,” he said.

That is unlikely to happen in the near future, however, as institutional investors are scarce and pension schemes are not compulsory. Instead, expats often prefer to send their savings abroad.