The GCC (Gulf Cooperation Council) is set to play a key part in the growth of the global sukuk market over the next five years, according to a report by Standard and Poor’s.

Levels of issuances by the GCC in 2011 exceeded the levels it achieved prior to the 2008 global financial crisis, boosted by a $9bn issue by the Central Bank of Qatar.

Issuances from the GCC could eventually match that of Malaysia, which currently issues 68.75% of global sukuks, due to its “economic resilience, strong project pipeline and regional refinancing needs”, the report added.

The need for North Africa to invest in infrastructure and a lack of diversified funding sources opens the region to potential sukuk issuances. However, the report pointed out that regulatory frameworks need to created from scratch, revamped, or to be effectively tested over time in order to pass the test of the market for a first issuance.

The global sukuk market saw issuance rise to $84.5bn in 2011, an increase of 64.5% on the previous year. In 2012 alone, $23bn has already been issued.