No doubt SFW readers are very aware that Iran is increasingly finding itself isolated economically and financially due to its nuclear weapons program. If not for Russia, Red China, India, South Africa and a few other nations, Iran would be completely isolated (sarcasm intended unfortunately).

Iran is currently looking to raise capital to fund its huge South Pars gas project. Judging from the article at the link below, the Iranians seem determined to use bonds to fund South Pars–and there is no suggestion that the bonds would be Shariah-Compliant, i.e. sukuk.

To top it all off, Iran is suggesting a “35% profit” on the bonds for investors. This is unusual terminology for a debenture. There is no discussion of yield to maturity date.

It has often been reported that Iran dominates the world of Shariah-Compliant Finance and President Ahmadinejad himself has boasted that Iran’s financial institutions, which are mostly state-owned or controlled, are all Shariah-compliant.

It would appear that the Islamic Republic of Iran is going haram to raise money for South Pars, a sign of desperation in our opinion.


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