Connect with us

News

Green Sukuk for Sustainable Development in Maldives

Avatar

Published

on

Green sukuk is in the global limelight in the midst of the pandemic. Green Sukuk are considered as Shariah compliant investments where the sukuk proceeds are used for selected environment friendly projects or green projects and investing in such sukuks will provide investors the certainty that their investments will be utilized only for environment friendly or green projects. It is reported by the World Bank that as of July 2020, USD$ 6.1 billion has been raised through 12 unique green sukuk issuers from Indonesia, Malaysia, the United Arab Emirates and by Islamic Development Bank (IsDB).

 What is Sukuk?

According to Regulation on the Issuance of Sukuk (Regulation No. R-53/2013) issued by the Capital Market Development Authority of Maldives, “Sukuk” is a certificate, document or electronic record evidencing the ownership of an asset or an investment satisfying the shariah principles and concepts approved by the Authority; and evidencing the ownership of the profit generated from the asset or investment. In Maldives, the first corporate sukuk was issued by the Housing Development Finance Corporation Plc in 2013. In 2021, it was reported that the government of Maldives has issued the first sovereign sukuk.

 Green Sukuk Frameworks

There are number of frameworks issued in different countries in the world to facilitate the issuance of green sukuks. For instance, in Indonesia, a Green Bond and Green Sukuk Framework to finance and or re-finance Eligible Green Projects via the issuance of Green Bonds and Green Sukuk is issued. According to this framework, sukuk proceeds can only be used to finance or re-finance expenditure directly related to “Eligible Green Projects.” Eligible Green Projects for the purpose are projects which promote the transition to low-emission economy and climate resilient growth, including climate mitigation, adaptation, and biodiversity in accordance with the criteria and process set out in the framework. However, the Eligible Green Projects shall exclude: new fossil fuel based electric power generation capacity and expenditure related to the improvement in the efficiency of fossil fuel based electric power generation; large scale hydropower plants (>30 MW capacity); and nuclear and nuclear–related asset. On behalf of the government, it is the National Development Planning Agency and the Ministry of Finance will review and approve projects / budget allocation / subsidies to be included in the State Budget. As for the management of the proceeds, it is stated in the framework that the proceeds of each Green Sukuk will be managed within the Government’s general account in accordance with sound and prudent treasury management policy and it is only upon request from the Line Ministries, the Green Bond and Green Sukuk proceeds will be credited to a designated account of the relevant ministries for funding exclusively projects as defined in the Framework. It is also stated in the framework that the Ministry of Finance who represents the Republic of Indonesia will prepare and publish a Green Sukuk report on its official website on annual basis and initially on the date falling no more than one year after the inaugural Green Sukuk issuance and this report shall contain minimum: a list and brief description of the projects to which Green Bond and Green Sukuk proceeds have been allocated; the amount of Green Bonds and Green Sukuk proceeds allocated to such projects; an estimation of the beneficial impact arising from the implementation of Eligible Green Projects; and reporting is expected to include measures of the reduction in greenhouse gas emissions, reduction in resource consumption, the number of parties that benefit from projects funded and other appropriate measures taking into account the nature of the project. It is also stated that the Republic of Indonesia will engage an independent third party to provide assurance on its annual Green Sukuk report and the compliance of each Green Sukuk issued in accordance with the Framework.

In Malaysia, Green Sukuk is part of Sustainable and Responsible Investment (SRI) Sukuk Framework issued by Securities Commission (SC) Malaysia. According to this framework, proceeds raised from the issuance of SRI sukuk shall be used exclusively for the purpose of funding activities or transactions related to the eligible SRI Projects. An internal process for evaluation and selection of the eligible SRI projects shall be established. Also, proceeds allocated for the eligible SRI projects are credited into a designated account or otherwise tracked in an appropriate manner. There must be an annual report prepared and published with at least the following information: Annual reporting on the following: original amount allocated for the eligible SRI projects; amount utilised for the eligible SRI projects; unutilised amount and where such unutilised amount is placed or invested pending utilisation; and list of the eligible SRI projects in which the proceeds have been allocated to as well as brief description of the said eligible SRI projects and their impact or expected impact. An external reviewer may be appointed to assess and provide report on the eligible SRI projects or the issuer’s compliance with the relevant requirements as set out in the SC’s guidelines. The eligible SRI green projects are projects on: renewable energy; energy efficiency; pollution prevention; management of living natural resources and land use; eco-efficient/circular economy adapted products; clean transportation; sustainable water and wastewater management; terrestrial/ aquatic conservation, climate change adaptation; and green building. In Malaysia, under the SRI Sukuk Framework, there are some tax deduction on SRI sukuk issuances which are: tax deduction for the expenditure incurred on the issuance of SRI sukuk approved or authorised by or lodged with the SC until the year of assessment 2023; and 90% of the proceeds raised are solely used for the purpose of funding SRI projects as specified in the Guidelines by the SC. Further, a Green SRI Sukuk Grant Scheme is also provided and the details of this Scheme is shown in the figure below.

Figure: Green SRI Sukuk Grant Scheme under SRI Sukuk Framework issued by Securities Commission (SC) Malaysia

Source: Securities Commission Malaysia (2019)

 Conclusion

Maldives being among the countries most vulnerable to climate change, need to introduce a sustainable framework for funding green projects and in this regard, green sukuk could be introduced to the country. In August 2015, the Ministry of Environment and Energy has introduced Maldives Climate Change Policy Framework (MCCP) has been issued covering sustainable financing where policy goal 1 states that: “ensure and integrate sustainable financing into climate change adaptation opportunities and low emission development measures.” To introduce green sukuk to Maldives, it is imperative to enact a specific framework for the purpose and this framework can be enacted by learning from the experiences of green sukuk issuances made in countries like Malaysia, Indonesia and United Arab Emirates. There is no doubt that by issuing green sukuks, the country can complement the Green Climate Fund initiatives.

 

Dr. Aishath Muneeza is an Associate Professor at the International Center for Education in Islamic Finance.

World

Mideast countries offer condolences over deaths of Iranian president, FM

FI

Published

on

By

CAIRO, May 20 (Xinhua) — Leaders across Middle Eastern countries on Monday offered their condolences to Iran over the deaths of President Ebrahim Raisi, Foreign Minister Hossein Amir-Abdollahian, and members of the accompanying team in a helicopter crash a day earlier.

Arab League Secretary-General Ahmed Aboul-Gheit said on his X account that “I offer my condolences to the Iranian people on the death of Raisi, Amir-Abdollahian, and other officials following the tragic plane accident.”

Secretary General of the Gulf Cooperation Council Jasem Mohamed Albudaiwi expressed condolences, emphasizing the council’s solidarity with the Iranian government and people in the hard times, reported the official Saudi Press Agency (SPA).

Saudi King Salman bin Abdulaziz Al Saud and Saudi Crown Prince and Prime Minister Mohammed bin Salman Al Saud sent condolences to Iran’s First Vice President Mohammad Mokhber on the deaths of Raisi and some members of his accompanying delegation, said a statement carried by SPA.

Türkiye “stands by Iran in these painful days” and “shares grief of Iranian people,” Turkish President Recep Tayyip Erdogan told Mokhber in a phone call on Monday, Erdogan’s office said in a statement.

Egyptian President Abdel-Fattah al-Sisi extended his sincere condolences to the people of Iran, expressing the solidarity of Egypt with the leadership and people of Iran during this tragic time, the Egyptian Presidency said in a statement.

President of the United Arab Emirates Sheikh Mohamed bin Zayed Al Nahyan expressed in a message “sincere condolences and deep sympathy to Iran, its leadership and people over the painful accident,” saying his country “stands in solidarity with Iran at this difficult time.”

Syrian President Bashar al-Assad, in a message, highlighted Syria’s solidarity with Iran and the families of the deceased, expressing his commitment to continuing the work initiated by Raisi to benefit both nations.

Algerian President Abdelmadjid Tebboune expressed his “deep sorrow and solidarity” with the Iranian people during “this difficult time,” lamenting “the loss of my brother and partner Ebrahim Raisi, with whom I was united in serving the bonds of brotherhood, cooperation, and solidarity between our two countries and peoples, and in supporting just causes.”

Chairman of Sudan’s Transitional Sovereign Council Abdel Fattah Al-Burhan on Monday eulogized Raisi, Amir-Abdollahian, and those who died in a helicopter crash, the sovereign council said in a statement.

In addition, King Abdullah II of Jordan, Iraqi President Abdul Latif Rashid, Tunisia’s Presidency, the Libyan Foreign Ministry as well as Lebanese Ministry of Foreign Affairs and Emigrants also extended condolences to the Iranian government and people.

The crash occurred on Sunday in Iran’s Varzaqan County as Raisi, along with his accompanying team on board three helicopters, was on his way from Khoda Afarin County, where he attended the inauguration ceremony of a storage dam with his Azerbaijani counterpart Ilham Aliyev earlier in the day, to the provincial capital Tabriz for the inauguration of a petrochemical complex.

The other members onboard Raisi’s helicopter, including East Azerbaijan’s Governor Malek Rahmati, Iran’s Supreme Leader Ali Khamenei’s Representative to East Azerbaijan Mohammad Ali Ale-Hashem, Raisi’s bodyguard, as well as the flight crew, also lost their lives.

Source(s): Xinhua

Continue Reading

World

Israel, Hamas reject ICC bid to arrest leaders for ‘war crimes’

FI

Published

on

By

Israel and Hamas, engaged in heavy fighting in the Gaza Strip, both angrily rejected on Monday moves to arrest their leaders for “war crimes.”

The International Criminal Court (ICC)’s prosecutor Karim Khan said he had applied for arrest warrants for top Israeli and Hamas leaders over the conflict.

Israel slammed as a “historical disgrace” the demand targeting Israeli Prime Minister Benjamin Netanyahu and Israeli Defense Minister Yoav Gallant, while the Palestinian militant group Hamas said it “strongly condemns” the move.

The U.S., Israel’s top ally, also rejected the ICC bid, with President Joe Biden denouncing it as “outrageous” and Secretary of State Antony Blinken warning the move “could jeopardize” efforts for a ceasefire in Gaza.

UN Special Coordinator for the Middle East Peace Process Tor Wennesland called for the resumption of negotiations between Israel and Hamas at the UN Security Council on Monday.

“If talks do not resume, I fear for the worst for the beleaguered and terrified civilians in Rafah, for the hostages held in unimaginable conditions for more than 225 days, and for an overstretched humanitarian operation that remains on the brink inside the (Gaza) Strip,” Wennesland said.

Also on Monday, Greek Foreign Minister George Gerapetritis urged enhanced joint efforts to halt the hostilities in Gaza and called on the international community to promote the two-state solution to end the Israeli-Palestinian conflict during his meeting with his Egyptian counterpart Sameh Shoukry.

The Israel-Hamas conflict continues to grind on unabated, with Israeli forces battling Hamas in Gaza’s far-southern city of Rafah, as well as in other flashpoints in central and northern areas.

Israel’s retaliatory offensive against Hamas has killed at least 35,562 people in Gaza, mostly civilians, according to the Hamas-run territory’s Health Ministry.

The UN said more than 812,000 Palestinians had fled Rafah, near the Egyptian border. Meanwhile, the European Union warned that 31 of Gaza’s 36 hospitals are no longer functioning while the rest are on the verge of collapse with more than 9,000 severely injured people at risk of dying.

The humanitarian suffering in Gaza has been eased only by sporadic aid shipments by land, air and sea, but truck arrivals have slowed to a trickle amid the Rafah operation.

The UN did not receive any aid from the pier on Sunday or Monday. “We need to make sure that the necessary security and logistical arrangements are in place before we proceed,” Reuters cited a UN official, who asked not to be named, as saying.

Another senior UN aid official, Edem Wosornu, told the UN Security Council that the closure of the Rafah crossing from Egypt had stopped the delivery of at least 82,000 tonnes of supplies, while access at Israel’s Kerem Shalom crossing was limited due to “hostilities, challenging logistical conditions, and complex coordination procedures.”

Source(s): CGTN

Continue Reading

News

President announce business and productivity expo

FI

Published

on

By

Maldives President Dr. Mohamed Muizzu on Monday, announced his decision to host a national-scale expo aimed at improving Maldives productivity and business portfolios.

President Muizzu announced the decision in reference to the paper submitted by Minister of Economic Development and Trade Mohamed Saeed at Sunday’s cabinet meeting.

Following the cabinet meeting, President Muizzu decided to initiate the “Dhiveheenge Ufehdhuntherikamuge Maurazu” (Maldivian Productivity Expo), announced President’s Office in its statement and added it is scheduled for May 2025.

“To ensure a competitive environment, the expo will facilitate participation of businesses from various sectors which would include Creative Economic District, Digital and Innovative District, Entertainment District, and Market Place District,” the statement read.

Ministry of Economic Development and Trade has assigned management of the expo to Business Center Corporation (BCC).

President Muizzu has also made key decisions with the ministers’ council on ensuring the expo’s sustainability as an annual event.

Source(s): sun.mv

Continue Reading

Trending