The Road to the SDGs

PURPOSE X Globally, the issuance of labelled bonds reached around US$ 1 trillion in 2019, with green bonds accounting for an aggregate 77% of this market and marking a new global annual record in 2019, with US$ 258 billion worth of issuances. Green Sukuk issuances reached approximately US$ 3 billion in 2019, representing 1% of the global green bond issuances. X IsDB entered the green bonds market by issuing its first Green Sukuk in November 2019, for a value of € 1 billion. This initiative reaffirmed IsDB’s longstanding commitment to play a catalytic role in the global Islamic capital market with innovative financing solutions, in order to help MCs to achieve the SDGs. X The asset-based Islamic Trust Certificates will finance SDG sectors in IsDB’s MCs through innovative financing for a total of 11 projects in: – Renewable energy – Clean transportation – Energy efficiency – Pollution prevention and control – Environmentally sustainable management of natural living resources and land use – Sustainable water and wastewater management. X The initiative will serve to further diversify IsDB’s funding sources by raising financing for ‘green’ projects in MCs, thereby helping to address gaps in SDG financing. As a result, the profile of IsDB as a green issuer received a massive boost in hitherto untapped financial markets. This also meets the requirements of the Awareness track of the P5P. METHOD X IsDB’s new business model focuses on leveraging innovative Islamic finance to strengthen the capacity of MCs as they work to attain the SDGs. The introduction of the Green Sukuk is in keeping with these aims and values. X The Sukuk Trust Certificates were classified as ‘green’ according to the Green Bond Principles (GBP) set by the International Capital Market Association. X The certificates were purchased by institutional investors. X The issuance raised a total of € 1 billion from the investors in return for the certificates. This amount was then fully committed for financing or refinancing a total of 11 green projects in the categories outlined above. First IsDB Green Sukuk T he launch of IsDB’s debut Green Sukuk reaffirmed IsDB’s commitment to play a catalytic role in the global Islamic capital market The 2030 Development Agenda demands the creation of alternative financing instruments to bridge the funding gap in global SDG financing. IsDB’s Green Sukuk provides an innovative financing instrument towards this end [ 152 ] SDGs