Green sukuks to drive finance for climate change investment projects

By 11/03/2012

Green sukuks to drive finance for climate change investment projects

DUBAI, 5 March 2012 –­­­ The Climate Bonds Initiative, the Clean Energy Business Council of the Middle East and North Africa and The Gulf Bond and Sukuk Association today announced they have launched a Green Sukuk Working Group. The group aims to channel market expertise to develop best practices and promote the issuance of sukuks for the financing of climate change investments and projects, such as renewable energy projects.

Green sukuks are Shari’ah compliant investment securities that finance projects meeting eligibility criteria developed by the International Climate Bond Standards scheme. The first meeting of the Green Sukuk Working Group was held last week in Dubai, United Arab Emirates.

Aaron Bielenberg of the Clean Energy Business Council said “There are a significant and growing number of projects, for example renewable energy in the Middle East, that are ideally suited to sukuk investors. This group will help investors more easily identify Shari’ah compliant, clean energy investment opportunities.”

Nick Silver of the Climate Bonds Initiative said “There is an urgent need to mobilize finance for both renewable energy and climate adaptation projects in both the Middle East and in other developing Muslim countries such as Bangladesh and Pakistan. Green sukuks are ideally suited for the financing of many of these investments.â

Michael Grifferty of The Gulf Bond and Sukuk Association said, “Interest in both Shari’ah compliant and ethical investing is on the rise. Green sukuks can support this trend by expanding the range of available financial instruments.  Green sukuks also support national development strategies by offering longer term finance for essential infrastructure.”

The eligibility criteria in terms of climate change solutions are derived from the International Climate Bond Standards scheme, backed by a group of leading, global institutional investors and environmental Non-Government Organisations consisting of the California State Teachers’ Retirement System (CalSTRS); the Natural Resources Defense Council; the California State Treasurers’ Office; the Investor Group on Climate Change (IGCC); the Carbon Disclosure Project; and the Ceres Investor Network on Climate Risk (INCR).

The scheme also has an industry working group that provides input into the formulation of eligibility criteria, with participation from organizations such as the International Finance Corporation (IFC), Standard & Poor’sAviva Investors and KPMG.

The Green Sukuk Working Group invites participation from other organisations interested in the potential of green sukuk financing.

About the Clean Energy Business Council:

The CEBC is a non-profit, non-governmental association established in Masdar City, Abu Dhabi which provides a unique, all-inclusive platform bringing together leading local and international organisations participating in the clean energy sector in the Middle East and North Africa.  Its mission is to drive the development of appropriate and much needed regulation and policy to support the growth of this vital sector. www.cleanenergybusinesscouncil.com

About Climate Bonds Initiative:

The Climate Bonds Initiative is an investor-focused not-for-profit, promoting large-scale investment in the low-carbon economy. www.climatebonds.net. The Climate Bonds Initiative is developing:

  • http://www.gulfbondsukuk.com/templates/ja_ores/images/bullet3.gif); line-height: 19px; overflow: hidden; background-position: 20px 7px; background-repeat: no-repeat no-repeat;”>Proposals for governance architecture — regulatory mechanisms, standards, tax policies, green banks — that will support a rapid scaling up of investment.
  • http://www.gulfbondsukuk.com/templates/ja_ores/images/bullet3.gif); line-height: 19px; overflow: hidden; background-position: 20px 7px; background-repeat: no-repeat no-repeat;”>Models for engineering investability in projects and assets necessary for attracting bond financing such as renewable energy, energy efficiency and forestry.

About The Gulf Bond and Sukuk Association:

The Gulf Bond and Sukuk Association (GBSA) is the regional trade association representing the Arabian Gulf bond and sukuk market. GBSA is composed of leading firms who support the region’s development by promoting a wide and deep fixed income market on the basis of international best practices. www.gulfbondsukuk.com

 

For more information please contact:

Sean Kidney, Chair, Climate Bonds Initiative, Telephone: +44.75.2506.833, sean@climatebonds.net

Loukia Papadopoulos, Clean Energy Business Council, loukia@cleanenergybusinesscouncil.com

Michael Grifferty, The Gulf Bond and Sukuk Association, mgrifferty@gulfbondsukuk.com