An Islamic finance technique used to finance the construction or manufacture of assets on terms compliant with Sharia. In an istisna'a transaction, a lender agrees to buy an asset to be delivered once construction or manufacturing of that asset is complete. The lender pays the purchase price of the asset in accordance with the progress of the asset's construction or manufacture that gives the contractor or manufacturer the liquidity it needs to construct or manufacture the asset. Once manufacture or construction is complete, the lender acquires the asset that it can then sell or lease to the contractor, manufacturer, or a third party for a profit. An istisna'a transaction differs from a bai al salam transaction in that:

For more information on istisna'a and other Islamic finance structures and techniques in the US, see Practice Notes:

For more information on istisna'a and other Islamic finance structures and techniques in the UK, see Practice note, Islamic finance: UK law overview.