IDB raises sukuk issuance programme ceiling from $10 billion to $25 billion

Muscat: A decision to raise the current limit of the Islamic Development Bank's (IDB) medium-term sukuk issuance programme from $10 billion to $25 billion has been approved. 

The board of executive directors (BOED) of IDB approved the decision at its 305th session which began on Sunday in Maputo, capital of the Republic of Mozambique, under the chairmanship of Dr Ahmad Mohamed Ali, chairman of the Islamic Development Bank Group. 

On this occasion, the BOED commended the huge success of programme in all its previous issuances since it began in 2003. 

This is a reflection of the high status and confidence the bank continues to enjoy in the international financial arena. The IDB is regarded as one of the few multilateralfinancing institutions that have been rated for more than 12 consecutive years with "AAA" , the highest international credit rating available, by the three major international credit rating agencies – Standard & Poor's, Fitch and Moody's.  This is in addition to the designation of the IDB as 'Zero-Risk Weighted' Multilateral Development Bank by the Basel Committee on Banking Supervision in 2004 and by the European Commission in 2007.  

The bank has decided to reintroduce its medium-term sukuk issuance programme.

 which is in line with the provisions and principles of the Islamic Sharia, with the aim of mobilising and injecting new financial resources from the international money market to meet the growing development needs in member countries. 

The $10 billion raised so far as part of the IDB's sukuk programme have been used to finance various development projects in member countries, particularly in the infrastructure sector. 

This is at a cost that is much lower than what it would have been if they were financed through regular financing institutions.  

The board also approved participation in several development projects in member countries amounting to nearly $450 million.

Approvals included $200 million for an energy project in Mozambique,$70 million for the import of agricultural equipment to Kazakhstan,$71.5 million for twopower projects in Senegal,and $30 million to support the integrated micro-financing programmes in Benin, in addition to $28.5 million towards the Mont Mbapite rural development project in Cameroon, $20.7 million for a road project in Togo, $16.3 million for two projects in Bangladesh, and $12 million for the reconstruction of road project in Kyrgyzstan.

(Times Of Oman / 10 June 2015)

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IDB plans benchmark sukuk issue around May 2015

SARAJEVO: Islamic Development Bank (IDB) plans to issue a benchmark-sized Islamic bond or sukuk in around May next year, said the bank’s President Ahmad Mohamed Ali.

In February, IDB, which has a top-notch AAA rating, priced a $1.5 billion, five-year sukuk, its largest ever Islamic bond.

“The new issue will for sure be close to this year’s issue ... maybe a little more or a little less,” Ali said on the sidelines of an economic conference in the Bosnian capital Sarajevo.

“We are planning to go to the market every year but the amount will depend on different factors. We will inspect the needs of the bank and the conditions on the market,” Ali said.

He said that IDB was considering whether to guarantee Tunisia’s proposed 700 million dinar ($431.79 million) debut sukuk.

The Tunisian issue is aimed at helping the North African economy recover after being hit by the 2011 uprising.

The issue had been planned for April or May but Tunisia’s central bank governor has said it was complex and was likely to take longer.

“No decision has been taken yet,” said Ali. 

He added that IDB’s insurance arm, the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), is also debating whether to extend a sukuk insurance product to boost the credit rating of Tunisia’s sukuk.

ICIEC launched the insurance product last year, viewing that the insurance policy could help sovereign issuers tap into strong investor demand for investment-grade sukuk.

“It is a new product. This is just a proposal and it is still under consideration,” Ali said. 

But he said that IDB might consider subscribing to the Tunisian sukuk.

“If Tunisia did issue a sukuk, IDB will definitely consider participating in such an issue because it is our policy to support our member countries in issuing their sukuk,” Ali said.

(Arab News / 15 May 2014)

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Islamic Development Bank Aims To Price Benchmark Sukuk On Thursday

Islamic Development Bank is aiming to price a benchmark-sized Islamic bond issue on Thursday after releasing initial price guidance for a five-year deal, a document from lead managers showed.

The supranational lender set initial guidance at mid-to-high 20s over midswaps, the document said on Tuesday.

While no definitive size has been set for the issue, the first from the AAA-rated bank since May, the document said that it was expected to be benchmark-sized – which is traditionally understood to mean in excess of $500 million.

The banks arranging the transaction are CIMB, Commerzbank, First Gulf Bank, HSBC, Natixis, National Bank of Abu Dhabi and Standard Chartered.

(Gulf Business / 26 Feb 2014)

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UK’s growing role in Islamic finance discussed

Islamic Development Bank (IDB) President Ahmad Mohamed Ali and the UK Senior Minister of State for the Foreign & Commonwealth Office, Baroness Warsi of Dewsbury, view positively the fast growth of Islamic finance in the UK.

During a visit to the IDB headquarters in Jeddah, Baroness Warsi told the IDB president that significant progress has been achieved by the UK government in making London not only the center of Islamic finance in the Western world, but one of the great capitals of Islamic finance in the world, as announced by UK Prime Minister David Cameron at the World Islamic Economic Forum held in London in late 2013.

"I am pleased to inform you that the UK is close to issuing its first sovereign sukuk (Islamic bond) and work on the practicalities is currently being carried out by leading financial institutions appointed by the UK government to arrange this issue possibly by mid-2014," said the minister.

She thanked the IDB president for accepting to be a member of the Global Group on Islamic Finance and Investment being set up by the UK government. This group brings together central bank governors and CEOs of major Islamic banks from across the world to identify and address the critical factors that will drive the global Islamic finance market over the next five years.

Ali and the minister reiterated their commitment to the growing IDB-UK partnership in the area of development assistance, especially in fragile situations such as Palestine and Somalia and the economic empowerment of women through the work of the new Arab Women Enterprise Fund.

"We have a strong relationship with the UK Department for International Development, and we are very satisfied with this exemplary partnership," Ali told the minister. Ali and Baroness Warsi also agreed to explore potential partnership opportunities in the development of Awqaf (endowments), an area with tremendous growth potential.

(Arab News / 21 Feb 2013)

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Malaysia: Jeddah-based IDB plans to develop Islamic centre of excellence at Tun Razak exchange

KUALA LUMPUR: The Islamic Development Bank (IDB) is considering developing an Islamic Centre of Excellence at the Tun Razak Exchange in the Greater Kuala Lumpur here in three to five years, Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said today.

He said the centre of excellence would provide services in Islamic finance and banking-related transactions.

The project would be developed in collaboration with the Malaysian government, he said.

"The Malaysian government has always viewed IDB not only as an international institution but also as a partner in charting our nation's growth," he said in his speech at the IDB High Level Regional Forum today.

(News Straits Times / 17 Dec 2013)

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