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Monday, March 02, 2020 / 6:18 PM / Bukola Akinyele for WebTV / Header Image Credit:Twitter; @isdb_group
The Islamic Development Bank (ISDB) and
the London Stock Exchange Plc (LSE) have both pledged to partner to boost Green
Sukuk globally.
The decision to develop the green Sukuk
market was part of key resolutions taken when the President of the ISDB, Dr.
Bandar Hajjar, met with the CEO of the LSE Plc, Nikhil Rathi, to discuss ways of
broadening their collaboration.
In 2018 the Green Sukuk market hit
$2.13bn, which translated to 0.53% of the total $401b Green bond size.
The Green Sukuk has recently emerged as a unique
example of a Sharia-compliant impact investing instrument with strong growth
prospects to fund environment-friendly endeavours.
The green Sukuk comes as the ISDB seeks to strengthen
its position in supporting Green financing measures that create cleaner global
environments.
ISDB, as an international financial institution, is
committed to supporting member countries of the Organization of Islamic
Countries to achieve the 2030 Sustainable Development Goals, SDGs.
The Green Sukuk focuses on three major areas, namely;
The LSE is a key global venue for the issuance of Sukuk. To date,
over US$50 billion has been raised through 66 issues of these alternative
finance investment bonds on the London Stock Exchange.
According to the Climate Bonds Initiative, a total of $117.8 billion in
green bonds and Sukuk were issued in the first half of 2019, up 48 percent
year-on-year (Y-o-Y).
The Climate Bonds Initiative has also identified the following eligible
assets for green Sukuk, to include: solar parks, biogas plants, wind energy projects,
renewable transmission and infrastructure projects, and electric vehicles.
Equally, they can be used to subsidize a government's green payments.
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