Islamic Project Finance: A Case Study of the East Cameron Project

Abstract

The objective of this article is to consider the challenges in structuring and implementing Islamic project finance in a manner that is in line with the Shari’ah in both Islamic and Western financial and legal environments. This is done through a case study of the East Cameron Project, the first ever sukuk issuance in the Unites States. Although the project was governed by U.S. law, it was able to indirectly accommodate Shari’ah principles and in turn to protect the rights of sukuk holders in a non-Islamic jurisdiction. The findings of this article are that the most important features of an Islamic project finance transaction that qualifies as an authentic Shari’ah-compliant transaction are investors having ownership of the underlying assets as well as sharing in the risk and return of the project. In doing this, a deal will be adhering to Shari’ah law, spirit, and principles.