Khartoum has set up the Sudan Salam Sukuk Company to sell the Islamic bonds. The new company is based in Bahrain.

The move is a way for Sudan to raise funds by targeting Gulf investors, after the US imposed sanctions on the country in May.

The funds will be used to “enhance oil production and meet oil-related operating costs,” according to the Central Bank of Bahrain.

No date has been given for the issue, but the sukuk is expected to mature in 2010.

In 2007, Sudan was the third largest oil producer in sub-Saharan Africa after Nigeria and Angola.