In an “Istisna” financing, the Bank enters into a contract with the customer requesting the financing ("Al- Mostasna") to execute a specific construction project, such as a residential compound, office building , private residence, or an apartment building, etc.. In addition to the standard documentation required in any financing request, the customer must also provide details about the project being financed including:

  • Ownership documentation.
  • Construction drawings and plans approved by pertinent authorities.
  • Bills of quantities and building specifications.
  • Project primary feasibility study including estimated revenue for repayment.

Unless the customer requests appointing a specific contractor to execute the work at their own risk, the bank will appoint a contractor via a formal tender process after which the contract will be assigned to the most qualified bidder.

Once the request for financing is approved, the bank provides the funds needed for the development and construction of the project. The bank engineering department supervises the project execution in coordination with the customer’s consultants and the contractor. At completion, the customer repays the bank the full “Istisna” amount including the bank profits, or, if pre-approved, in installments.