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13 November 2019
SUKUK

IsDB mulls $500 million green Sukuk issuance

The AAA-rated lender hired Citi, First Abu Dhabi Bank as well as HSBC, Natixis, Societe Generale and Standard Charted Bank as joint lead managers and bookrunners for the issuance.

BLOOMBERG/MARTIN BARZILAI


Saudi-based Islamic Development Bank (IsDB) has announced plans to issue its debut green Sukuk this month, having finalised a Sustainable Finance Framework to help issue such bonds that will be used for green projects in the lender’s member countries.

HE Dr. Bandar Hajjar, the President of the IsDB, said that the bank has finalised and published a Sustainable Finance Framework, under which we will be issuing our first-ever Green Sukuk this month as we march ahead in our pursuit of the SDGs.”

IsDB stated that the Sukuk will be issued to help leverage greater funds from capital markets into specifically green development projects though Islamic financing—a method that places great importance on improving the quality of life, social equity and fair-trade relations.

Moody’s predicted that the amount of Sukuk to be issued this year will increase to $130 billion from $123.2 billion last year, after hitting $87.4 billion in the first six months.

Hajjar said that there has been a rise in domestic Sukuk because there is a need to finance infrastructure projects, which require a huge amount of money and budget in each country, especially our member countries.

The Jeddah-based lender stated that it provides financing in various sectors such as agriculture, infrastructure as well as energy and health—having mainstreamed its focus on Sustainable Development Goals (SDGs) in its operations.

The President of the IsDB and Werner Hoyer of the President of the European Investment Bank also signed an MOU to set out the framework of cooperation for co-financing. The institutions intend to dedicate funds worth $1 billion over the next five years for co-investment in countries of joint operations.

Green bonds are a growing category of fixed-income securities and green Sukuk could widen the appeal of Islamic bonds beyond traditional markets in South Asia and the Middle East to include ethical investors in Western countries.


RELATED STORIES: GREEN BONDS SDGS ISLAMIC DEVELOPMENT BANK SUSTAINABLE FINANCE FRAMEWORK SUKUK

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