The Islamic Development Bank Group (IsDB) has set aside $2.3 billion for its Strategic Preparedness and Response Programme to tackle the economic fallout of the corona pandemic
The funds are primarily destined for erecting a robust trade and investment platform that allows OIC (Organisation of Islamic Cooperation) member countries to access opportunities and attain the United Nations’ Sustainable Development Goals.
On Monday, a webinar organised by the IsDB in close cooperation with the United Arab Emirates’ Ministry of Economy and the Annual Investment Forum (AIM) in Dubai, attracted hundreds of participants, representing a wide array of industries, multilateral organisations, and other stakeholders.
In his opening remarks, IsDB President Dr Bandar Hajjar emphasised that the group has been working tirelessly to mobilise every available dollar towards the relief effort. The bank’s private sector entities (Islamic Corporation for the Insurance of Investment and Export Credit – ICIEC; Islamic Corporation for the Development of the Private Sector – ICD; and, International Islamic Trade Finance Corporation – ITFC) have some $700 million at their disposal for initiatives to stimulate foreign direct investment and trade.
ICIEC CEO Oussama Kaissi expressed concern over the effects of the pandemic on trade volumes and small- and medium-sized enterprises: “Harsh conditions for global trade are exacerbated by the tightening of the export credit insurance market, leaving many businesses highly exposed. Now more than ever, international partners must come together in solidarity to support countries as they face this once-in-a-generation crisis. It is essential for ICIEC to provide support in stabilising the trade ecosystem whilst also planning for recovery across our 47 member countries.”
Ayman Sejiny, ICD CEO, added that his corporation has set up a dedicated $250 million facility for SMEs in member states severely affected by the viral outbreak: “This emergency funding would be mainly in the form of medium- to long-term financing instruments to alleviate the economic burden faced by existing and new clients.”
During the webinar, the IsDB unveiled three online initiatives set up with help from the UAE Ministry of Economy that will help countries and private sector businesses showcase opportunities to investors.
OIC member states may partake in Digital Country Presentations – a new global gateway that offers investors, governments, and institutions an in-depth overview of upcoming trade and investment opportunities.
SMEs can open a virtual ‘stall’ on Made in Series – an open platform that enables smaller businesses to present products, projects, and services to a global audience. A Startups Pitch Competition encourages budding entrepreneurs to hone their presentational skills with winners gaining access to global startup platforms where they may secure the financing and expertise necessary to underpin the accelerated development of their business.
Earlier this month, the IsDB made headlines with the successful placement of its first-ever sustainability sukuk (a sharia-compliant bond). The $1.5 billion raised is earmarked for social projects, including job creation and inclusive access to essential services, under the IsDB’s Sustainable Finance Framework.
Due to strong demand, the joint bookrunners decided to reduce the mid-swap price by 15 basis points to 55 bps, resulting in an overall yield of 0.908% – the lowest-ever for a sukuk issued by the IsDB. The bank’s first ($1bn) green sukuk, placed late last year, carried a 1.909% rate. In a testament to the IsDB’s institutional strength, 79% of the sustainability sukuk was allocated to central banks and other official institutions.
According to Group President Hajjar, the latest sukuk placement allows the IsDB to tackle the aftermath of the pandemic with strong interventions in affected countries and sectors. Dr Hajjar also called on the Islamic finance sector to make use of social and sustainable sukuk as alternative asset classes that can help counter the impact of the corona pandemic.