By Arno Maierbrugger
A Malaysian investment group, Asean Union Inc, is pushing ahead with a $10bn project planned in the southern part of Laos that would comprise an offshore financial centre, residential and commercial housing, communities for foreigners and a tourism and family entertainment complex located in a special economic zone in Laos’ Savannakhet province. The project, called Asean Paradise Savan City, would be by far the biggest of its kind in Laos and the entire region, said Asean Union chief executive Chew Chai Jin, whose company is incorporated in Malaysia’s offshore financial centre of Labuan.
The development is a joint venture involving three parties — Asean Union, the Laos government (30%) and Savan City Co of Thai investor Chanchai Jaturaphagorn. Asean Union has already set up funding offices in Indonesia, Hong Kong, Macau, Laos and Thailand whose role is to cross-search for investors, targeting the Middle East, Japan, China, Singapore as well as Malaysia. Construction of the project should start in July this year. It is located across the second Friendship Bridge between Savannakhet province in Laos and Mukdahan province in Thailand along the Mekong River and will cover a total area of around 272 hectares, divided into four separate zones.
Zone A and D are planned to be completed within the next three to five years with the first bunch of investment of at least $2.5bn brought in from Asean Union Inc and Savan City Co Zone A will comprise a commercial area, an offshore financial centre, retail, an entertainment complex, duty free shopping and hotels. Zone D will have an international school, residences and hospital. B and C are designed as an industrial area and logistics hub, respectively.
The developer points out that the financial free zone of the project is designated as a duty free zone with special privileges, including a self-governing tax regime. Commercial activities envisaged to operate in the economic free zone will include offshore company incorporation, economic citizenship, shipping and aircraft registration including crew and payroll management, as well as an international auction centre.
As for its location, the Asean Paradise Savan City is in easy reach from Laos’ neighbouring countries, and is also connected through Savannakhet airport with the outside world. This makes the developer believe that it will be of great attraction for local and international tourists. The tourism and family entertainment hub of Asean Paradise Savan City will thus comprise theme parks, luxury hotels and spas, golf courses, duty free shopping facilities with designer brands and food and beverage outlets. A “cultural zone” will boast boutique hotels, more duty free shopping zones, an Asian food centre, garden restaurants and a collectors’ market.
The developer hasn’t made it clear when the project is eventually going to be completely finished, so anyone interested in investing should do their due diligence. Asean Union Inc has a track record of projects in Malaysia and one resort in Indonesia and is, in the case of Asean Paradise Savan City, backed by the government of Laos.
Barwa Bank is joint lead manager for UK’s
sovereign sukuk debut
Barwa Bank has been appointed as one of five Joint Lead Managers for the UK’s £200mn debut sovereign sukuk, a landmark transaction that will see the first Shariah compliant issuance by a western nation.
Barwa Bank takes its place alongside HSBC, Standard Chartered, National Bank of Abu Dhabi, and CIMB of Malaysia. Of the five banks involved, Barwa Bank is the only Qatari bank selected and the only wholly Shariah-compliant mandated bank on the panel.
“We were delighted to be appointed for this prestigious transaction alongside major international and regional banks. Securing a mandate like this one is the clearest statement of our credibility, track record, solid relationships, and delivery. We are very ambitious and have proven that we have the energy, enthusiasm, and capabilities to be part of this process,” said Barwa Bank chairman and managing director Sheikh Mohamed bin Hamad bin Jassim al-Thani.
Barwa Bank acting chief executive officer Khalid al-Subeai said: “Our appointment reflects our expertise in the rapidly-expanding international Islamic capital markets and we are very proud to be associated with the first UK sovereign sukuk alongside major international banks. It is also a significant milestone for the profile of Shariah-compliant finance worldwide.” Al-Subeai said Barwa Bank now expects to see other governments around the world that are traditionally reliant on conventional financing to look “with great interest” at the Shariah-compliant alternative.
The Exchequer chancellor George Osborne said: “Today’s issuance of Britain’s first sovereign sukuk delivers on the government’s commitment to become the western hub of Islamic finance and is part of our long-term economic plan to make Britain the undisputed centre of the global financial system.”
Osborne noted that the UK has seen “very strong demand” for the sukuk, resulting in a price that delivers “good value for money for the taxpayer.”
“I hope that the success of this government issuance will encourage further private sector issuances of sukuk in the UK,” Osborne added.
A Treasury spokesperson added: “We are very grateful for the efforts of Barwa Bank and the other Joint Lead Managers in contributing to the success of the UK’s debut sovereign sukuk issuance.”
Barwa Bank has been involved in a number of high-profile international sukuk issuance transactions, including Turkey, Islamic Development Bank, Dubai, and Qatar’s $4bn-sukuk issue.