UPDATE 1-UAE's Ras al-Khaimah plans $2 bln Islamic bond sale

(Adds rating, quote, details of tranches)

MANAMA, May 4 (Reuters) - Ras al-Khaimah, part of the United Arab Emirates federation, plans to sell up to $2 billion of bonds that comply with Islamic law to fund infrastructure projects, said a person with direct knowledge on Sunday.

The first group of bonds will be at least of benchmark size, typically $500 million, said the person, who did not want to be identified. Meetings to market the five-year bonds, or sukuk, start this week.

Standard Chartered Plc (STAN.L: Quote, Profile, Research) has been mandated as the sole lead-manager and bookrunner for the programme, the London-listed lender said in a statement on Sunday.

If sold in dirhams, the bonds would be the first rated dirham sovereign sukuk. Other tranches could be sold in dollars, said the person.

Ratings companies Fitch, and Standard & Poor's each give the government of Ras al-Khaimah an "A" rating.

"The money raised will be used to fund infrastructure development and also to set pricing levels for the RAK private sector," the person said.

Bankers say sovereign sukuk sales makes corporate issuance easier by providing a benchmark against which pricing can be compared.