Islamic Development Bank Announces Highest Ever $2bn Sukuk; Thanks Partners For Support
Islamic Development Bank (ISBD) recently announced that it achieved its highest ever order book at the launch of its $2bn Sukuk. The launch occurred with tight pricing and a cautious market environment that did not deter investors from supporting the ISDB’s largest Sukuk issue, with an AAA-rated credit.
Speaking at the $2bn Sukuk launch, the President of the ISDB, Dr. Bandar Hajjar, said, “The launch of ISDB’s largest ever Sukuk is a great cause for celebration for ISDB Group, partners & Member Countries. Special thanks to our partners, including Citibank, Dubai Islamic Bank, HSBC Bank, Natixis, Standard Chartered Bank & Islamic Corporation for the Development of the Private Sector for supporting our Sukuk listing”.
The Islamic Development Bank (ISDB) in 2019 said it would raise around $2 billion through multiple Sukuk issuances in the year, which, according to Hajjar, was the bank’s breakthrough Sukuk plan. The ISDB, which is the largest development organization in the Muslim world, is focused on empowering lives and driving Islamic Finance across the globe.
According to the IPE magazine, the global Islamic finance and banking industry has been growing at twice the rate of conventional markets, driven largely by expansions in Malaysia and the Middle East. Assets in the sector are estimated to reach $2trn by 2015, up from $1.6trn in 2012. With Muslims representing a quarter of the world’s population, and an increasing number of conventional finance investors seeking ethical and uncomplicated instruments following the 2008 financial crisis, the potential for growth is immense.
The Islamic Development Bank is a multilateral development finance institution for Islamic finance located in Jeddah, Saudi Arabia. There are 57 shareholding member states with the largest single shareholder being Saudi Arabia.
In terms of structure, the ISDB has evolved into five Entities, consisting of Islamic Development Bank (ISDB), Islamic Research & Training Institute (IRTI), Islamic Corporation for Development of the Private Sector (ICD), Islamic Corporation for Insurance of Investment and Export Credit (ICIEC) and International Islamic Trade Finance Corporation (ITFC).
The Islamic Development Bank is involved in the following activities which include;
- Project financing in public and private sectors;
- Development assistance for poverty alleviation;
- Technical assistance for capacity-building;
- Economic and trade cooperation among member countries;
- Trade financing;
- SME financing;
- Resource mobilization;
- Direct equity investment in Islamic financial institutions;
- Insurance and reinsurance coverage for investment and export credit;
- Research and training programs in Islamic economics and banking;
- Awqaf investment and financing;
- Special assistance and scholarships for member countries and Muslim communities in non-member countries;
- Emergency relief; and
- Advisory services for public and private entities in member countries.
Also, the ISDB is one of the development finance institutions that is leading the advocacy for achieving the 2030 Sustainable Development Goals for its member countries, especially the developing nations.
For Nigeria, one of the member countries of the Organization of Islamic Countries, OIC, its Non-Interest Finance market is evolving with 2 Sovereign Sukuk issued in 2017 and 2018 by the Federal Government at N100bn each, bringing it to the total of N200bn.
According to the Debt Management Office of Nigeria (DMO), there are plans to issue a third national Sukuk; the new Sukuk is expected to be issued within Q1 2020.