 In this module, we shall look at a Sukuk structure which is based on Istisna. When Sukuk segments are coming, we will also read about Istisna-based Sukuk. However, it is important that we refer to a Sukuk structure when we are trying to study applications of Istisna as an Islamic mode of financing. A number of infrastructure projects around the world, especially in the Muslim world and more importantly in the countries where development is taking place with a rapid pace, i.e. the GCC countries, a number of Sukuk structures have been based on Istisna. Either they are based on Istisna or they have borrowed some elements of Istisna. We shall, as I said, refer to some of these Sukuk structures when we cover the topic of Sukuk. But right now, let us look at a very simple Sukuk structure which is based on the Istisna agreement. The central to this is this Istisna agreement between the obligor and the issuer. Obligor in Sukuk structures, for your benefit, many of you might not be aware of investment jargon. Obligor is a party which is looking for financing. So this party, it could be a construction company, it could be a property developer, it could be an investment company. This is looking for financing to undertake a construction project. So this party, which is obligor looking for money, it arranges for setting up of an SPV. And I have previously mentioned that this SPV could be in an offshore jurisdiction. It could be an onshore company as well. However, normally, if the size of the project is very big, it is a practice to have this SPV registered in an offshore jurisdiction where the application of international laws is there so that in case of any dispute, the transacting parties should have recourse to an agreed court. If this SPV is in a country like say Pakistan where Pakistani laws are applied and if the investors happen to be international, then many international investors may not have complete faith and trust in Pakistani judicial system. So for a variety of reasons, these SPVs are registered or domiciled in the jurisdictions which have good reputation from legal viewpoint. This SPV issues Sukuk and the investors, they actually invest in the structure through purchase of Sukuk. Now Isthisna agreement between the obligor and SPV would allow the issuer i.e. SPV to pay the money to obligor as per progress of the construction project pursuant to the Isthisna agreement. Now in Isthisna based activities, there is always another contract which is called forward lease. These investors, especially if they happen to be financial institutions and big corporates, the moment they invest money somewhere, their accounting practices require that they should start receiving a return on a monthly basis, on a quarterly basis, 6 monthly basis or at least annual basis. To make sure that this frequency of distribution is there, there is a forward lease contract between the obligor and the issuer. That allows the obligor to pay rentals to the issuer which becomes the basis of the payments to the Sukuk holders on a frequent basis. At the end of the financing period, when the property has been developed or whatever was going to be constructed has taken place, that asset is either sold to a third party purchaser or the obligor buys it or retains it and pays the price of that asset to the SPV which then pays back the investments of the Sukuk holders. This is how this Isthisna based Sukuk actually takes place and these are the simple details of Sukuk structure based on Isthisna. As the students can appreciate by now that the Islamic modes of finance, their applications in practice are quite complicated. This is why I would like to urge you to take some serious time to study Islamic modes of financing if you really want to have good understanding of Islamic banking and finance. Only if you have good understanding of Islamic banking and finance, you would believe in it otherwise you may become one of its critics.