GREEN SUKUK INITIATIVE
A unique example of a Shariah compliant impact investing instrument
Green Sukuk has recently emerged as a unique example of a Sharia compliant impact investing instrument with strong growth prospects to fund environment-friendly endeavors.
Green sukuk are asset-based financial instruments structured to provide funding for renewable energy and environmental projects, among others.
ABOUT THE INITIATIVE
The Green Sukuk Initiative launched aiming at three goals:
- Facilitating access to finance for renewable energy projects in developing countries and across the world
- Providing financial solutions to environmental challenges
- Expanding the role of Islamic finance in achieving the SDG
Convening stakeholders from both public and private sector, the initiative focuses on raising awareness and helping stakeholders build capacity for utilizing Green Sukuk in renewable energy projects as an alternative financing instrument. Green Sukuk Initiative was piloted in Istanbul in 2018 with a workshop participated by representatives from public and private sector. The workshop aimed at:
- Creating an enabling environment for mobilizing private capital for financing renewable and sustainable energy projects
- Building a greater understanding of recent developments and current framework available in Turkey for green initiatives
The workshop offered a unique opportunity for stakeholders from the public and private sectors to discuss challenges and opportunities regarding the Green Sukuk market in Turkey and to identify potential solutions.
The Green Sukuk Initiative implemented its activities in Turkey, Pakistan and Uzbekistan
To expand the initiative and replicate in other countries, UNDP IICPSD and Islamic Development Bank Institute (IsDBI) collaborated with the Securities Commission Malaysia (SC), and Islamic Corporation for the Development of the Private Sector (ICD) of Islamic Development Bank (IsDB).
OBJECTIVES OF THE ASSIGNMENT
In 2019, Green Sukuk Initiative conducted a pre-feasibility study for a Green Sukuk issuance in Pakistan, at the federal government level focusing on the Punjab Provincial Government identifying the stakeholders from public and private sector and analyzing the potential opportunities and challenges.
The feasibility study was validated with local and national stakeholders in Pakistan through a validation workshop where concrete next steps will also be identified.