IsDB announces plans to launch first green bond

The Islamic Development Bank has announced it has created an innovative Sustainable Finance Framework to utilise funds exclusively for green projects in IsDB Member Countries through and catalyse the role of the Bank’s preferred financing tool – the Sukuk bond.

Through the new Framework, the green Sukuk will be the first of its kind in Europe following the very first globally seen green Sukuk launched in Malaysia in 2017. The Sukuk will be issued to reflect the IsDB’s ambitions to help leverage greater funds from capital markets into specifically green development projects by unlocking the necessary funds though Islamic financing, a method that places great importance on improving the quality of life, social equity and fair-trade relations and; forbids profiteering at the expense of others, or investment in businesses that damage society.

In a statement H.E. DR. Bandar Hajjar, President of the IsDB said: “It gives me great pleasure to announce that IsDB 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, the Framework allows us to leverage innovative Islamic financing instruments such as the Green Sukuk in order to mobilise resources for Green projects in our Member Countries.”

To mark the occasion, the IsDB held their annual Sukuk Summit 2019: Investing for Development in Luxembourg where key partners – including Ministry of Finance of Luxembourg as co-host – were gathered to welcome the announcement and explore the new opportunities within the Framework, and how these opportunities might be mobilised to help strengthen Luxembourg’s position as a leading Hub for Islamic Financing.

As part of the Summit, and reflecting on themes of the day, President Bandar Hajjar of the IsDB and President Hoyer of the EIB in the presence of Luxembourg Minister for Finance Pierre Gramegna signed an MOU to set out the framework of cooperation for co-financing. Each institution intends to dedicate funds worth USD1 billion over the next 5 years for co-investment in countries of joint operations. With a priority to countries in Africa and the Middle East – in particular in fragile countries, the financing will target jobs creation and growth; vital infrastructure; support for climate action; and technology and innovation.

Funds raised via Sukuk issuance are utilised by IsDB for its general corporate purposes, which include financing for medium and long-term projects in its Member Countries. Financing is provided in various sectors such as agriculture, infrastructure, energy, health and others. In recent years, IsDB has mainstreamed its focus on the SDGs in its operations.

Original source: IsDB
Published on 11 November 2019