The government plans to sell up to Rp 5 trillion ($485 million) of Islamic bonds, or sukuk, to institutional investors by the end of the second quarter, in a bid to help plug this year’s budget deficit, a senior Finance Ministry official said on Friday.

“Shariah bonds will be offered on the domestic market, given tight liquidity in global markets,” said Dahlan Siamat, director of Shariah financing at the ministry’s treasury management office.

The country issued its first sukuk in August 2008 in two series: the IFR-0001 series, worth Rp 2.714 trillion, and the Rp 1.195 trillion IFR-0002 series.

The government, according to data from the treasury management office, has to date sold Rp 11.3 trillion worth of Islamic bonds, with Rp 5.55 trillion worth purchased by retail investors in February.

Another $650 million was raised by a dollar-denominated Islamic global bond in April.

Dahlan said the Finance Ministry was looking for more underlying assets to cover the planned sukuk issuance, because only about Rp 500 billion of assets were currently available.

He said the ministry was still appraising assets of government ministries and agencies tentatively valued at Rp 27 trillion.

“If that figure is agreed on, we won’t use all of the assets,” Dahlan said.

“Rather, we’ll hold some in reserve to back next year’s Shariah bond sales.”

The government at one stage had planned to use the Rp 55 trillion Gelora Bung Karno sports stadium in Jakarta as an underlying asset to back its Shariah bonds, but the plan was eventually abandoned due to its politically sensitive nature.

The government is now forecasting a deficit of about Rp 139.5 trillion this year, which amounts to 2.5 percent of gross domestic product.

Net government bond sales this year, including conventional bonds, are expected to garner roughly Rp 99.7 trillion.

In addition, the government plans to borrow about Rp 45 trillion from the World Bank, Asian Development Bank, Japan and Australia.