Government of Republic of Indonesia (GoI) through the Ministry of Finance (MoF) has recently issued state sharia securities (Surat Berharga Syariah Negara–SBSN) targeted for Indonesian individual investors, in the form of Sukuk savings (Sukuk Tabungan) series sT-003 (“ST-003”) on February 2019 and Government Retail Sukuk (Sukuk Negara Ritel) series sR-011 (“SR-011”) on March 2019. Pursuant to MoF Regulation no. 125 year 2018 on the Issuance of Retail sBsn, sT-003 and sR-011 are projects and assets based sukuk with underlying projects and assets as listed in 2019 state Budget and list of state-Owned Assets (Barang Milik Negara–BMN), hence aim to finance various government infrastructure as well as non-infrastructure projects. With the concept of asset-based investment, investing in sukuk is relatively low-risk since the GoI owns the underlying assets; meanwhile, from the government side, sukuk can be deemed as alternative financing from traditional reliance to state Budget to finance public infrastructure projects. Example of infrastructure projects financed by the issuance of sT-003 and sR-011 include Trans sulawesi railway (crossing Makassar- Pare-Pare) in south sulawesi, Petuk Kupang Bridge in East Nusa Tenggara, and Regional Road of Tayan-Tanjung-sanggau in West Kalimantan.

Unlike conventional bond instrument, sukuk issuance is structured as the sale of beneficial right over certain underlying assets. Returns are derived from such assets in the form of leasing fee (ujrah), margin fee, profit sharing or other sources in accordance with the agreed contract. sT-003 and sR-011 have no default risk because the GoI guarantees the investors.

Sukuk shall only be issued according to sharia opinion issued by national sharia Board- Indonesian Council of Ulama (Majelis Ulama Indonesia). This instrument should be free from riba (usury), gharar (uncertainty) and maysir (gambling), as well as issued based on Akad (contract complying with sharia principles). In order to ensure the compliance of sukuk issuance with sharia principles, the issuance of both sT-003 and sR-011 does not only involve the GoI but also the sukuk issuer company entering into certain Akad with the GoI. sT-003 was issued under Akad Wakalah whereby the sukuk issuer company shall declare that it acts as the representative of sukuk holders (investors) to manage the funds in various profit-generating activities. This company will afterward purchase the beneficial right over underlying assets from GoI under Akad Bai’ (sale and purchase) using the investor funds. Furthermore, sR-011 uses Akad Ijarah Asset to be Leased whereby the GoI will lease the Ijarah object (projects/BMn) to be procured by sukuk issuer company based on GoI order, and the leasing fee will be paid to the sukuk holders (investors).