The Road to the SDGs

T H E R O A D T O T H E S D G s | P R O G R E S S A N D A C H I E V E M E N T S IsDB intends to work with governments and civil society organisations to support programmes directed towards helping refugees from MCs to western countries. Such support will be in the form of educational programmes and vocational training, particularly in the early stages of refugee arrival. This initiative, in which priority is given to women and children, was discussed with a major association in the UK and with the mayor of London. The IsDB External Outreach section will undertake expanding the scope of those programmes so as to include Muslim communities in many non-member countries. IsDB reaffirms its commitment to support regional and global efforts to strengthen the link connecting peace, relief and development. It will continue to play the role of financier and catalyst through the network of developers, helping with resource mobilisation through innovative mechanisms and concessionary terms to achieve the common vision of “peace and development for all”. QUESTION: In a remarkable development, IsDB recently issued two types of Sukuk: Green Sukuk and Sustainability Sukuk. What projects have been, or will be, funded by the proceeds of these issuances? And how do you see the future of the global Sukuk market and Islamic banking in general in the light of the fintech revolution? ANSWER: IsDB began issuing Sukuk in 2003, reaching to date a total volume of approximately US$ 33 billion. It issues these Sukuk to expand its capacity to mobilise resources to support development projects in MCs, consolidate its lead in the global financial markets and develop those markets. The proceeds of these Sukuk are used to finance projects in infrastructure, agriculture, energy, roads, health, education and other sectors. In 2019, IsDB issued the first Green Sukuk in its history worth EUR1 billion. The proceeds of the issue were used to finance a range of projects related to climate change, renewable energy, environment-friendly transport, energy efficiency improvement, water management and sanitation. They were the first AAA-rated Sukuk in global capital markets. In June 2020, after the emergence of the COVID-19 pandemic, IsDB issued its first Sustainability Sukuk worth US$ 1.5 billion to finance social projects in MCs to promote healthcare and job creation. Those were the first of their kind related to COVID-19 in the global capital markets and confirmed IsDB's leadership in the global Sukuk market. Creativity and innovation in the Sukuk market are wonderful. For example, the Global Alliance for Vaccines and Immunization (Gavi) issued Sukuk that raised more than US$ 500 million to help protect tens of millions of children from preventable diseases, which truly reflects the broad social impact of Sukuk investments. There is much that we can still do. I do not want Islamic finance to be perceived as being geared to serve Muslims only. Rather, it is a means for ethical investments in long-term sustainable projects to the benefit of Muslims and non-Muslims alike. Investors everywhere look for investments that realise returns and sustainability. Islamic finance has a proven track record of promoting financial, economic and social impact, as well as financial inclusion. In this context, the UK was the first non-Muslim country to issue Sukuk in 2014. Al Rayan Bank in Britain was the first in the world to issue public Sukuk in a non-Muslim country. The UK has now five full-fledged Islamic banks, and 20 others that have Islamic product windows. Moreover, Britain is a major hub for Shariah- compliant insurance companies, as well as asset managers and many Islamic consulting firms. All IsDB Sukuk are issued and registered on the London Stock Exchange. The Financial Conduct Authority (FCA) authorised IsDB Sukuk as a liquid financial income instrument. IsDB Sukuk are also accepted by the Bank of England as eligible collateral for its repos. They are also recognised by the Basel Committee for Banking Supervision and the Commission of the European Communities, which both consider IsDB a zero-risk development bank. Islamic finance, and Sukuk in particular, has huge potential for growth. Islamic banking has grown globally by 20% over the past decade to about US$ 3.5 trillion, and there is rapid growth in the Sukuk market as well. IsDB organised the first Sukuk conference in the London Stock Exchange in 2018, which was attended by prominent British figures from the government and the banking financial sector, including Mr. John Glen, Economic Secretary to the Treasury and City Minister, Mr. Sajid Javid, Secretary of State for Housing, Communities and Local Government, Mr. Nikhil Rathi, Chief Executive of FCA and Sir Peter Estlin, Alderman of the City of London Corporation. It organised the second Sukuk conference in Luxembourg in 2019 in collaboration with the Ministry of Finance of Luxembourg. It also conducts promotional campaigns to educate investors around the world, specifically targeting central banks and investment institutions. Fintech has gained a great deal of interest from companies in Britain and the United States, given the digital revolution the world is currently witnessing. There are 27 companies in Britain, 9 in the United States, 15 in the United Arab [ 19 ]