Unlocking Impact Capital for a Sustainable Future

The GSG Leadership Meeting 2023 was held on 30 May in Istanbul under the theme “Path to Impact Economy: Bridging the Global North and South in Türkiye’s Centennial Year.” The meeting aimed to explore Türkiye’s potential as a catalyst for impact investing in the MENA, Eastern Europe and Central Asian regions, focusing on four strategic themes: impact leadership, unlocking impact capital, women empowerment, and impact measurement and management.

The Unlocking Impact Capital Roundtable addressed the need for increased awareness of, variety in, and accessibility to capital supply in order to support the expansion of the impact economy. The panel discussed the role of private capital in achieving the Sustainable Development Goals (SDGs) and the importance of inclusive and sustainable interventions and partnerships.

The roundtable featured panelists from various organizations, including the United Nations Development Programme (UNDP) Istanbul International Center for Private Sector in Development (ICPSD), the U.S. International Development Finance Corporation, the Ministry of Industry and Technology of Türkiye, the Development and Investment Bank of Türkiye, Courageous Capital Advisors, the Participation Banks Association of Türkiye and Unilever Türkiye.

In the panel discussion, Mr. Sahba Sobhani, Director of UNDP ICPSD stated: “Green Sukuk has emerged as a unique and innovative product channeling Islamic finance capital into eligible green projects. Green Sukuk is an asset-based financial instrument structured in compliance with Islamic law (Shariah) and can provide financing and investments for green infrastructure projects.”

The panelists highlighted that Green and Sustainability Sukuk totaled $4.4 billion in 2022, following a record issuance of $6.1 billion in 2021, representing 4 percent of total Sukuk issuance, while ESG Sukuk grew 35 percent, from $6 billion in 2021 to $8.1 billion in 2022. The panelists also stressed that Green and Sustainability Sukuk has reached a new high, with demand driven by ESG-centric investors, and emphasized the potential of Green and Sustainability Sukuk to raise $30 billion to $50 billion in capital for SDG financing by 2025.

Mr. Sobhani underlined the role of the Global Islamic Finance and Impact Investing Platform (GIFIIP)’s Green Sukuk Initiative in raising awareness and expanding capacities to utilize Green Sukuk for green infrastructure projects as an alternative financing instrument. Mr. Sobhani then elaborated on GIFIIP’s Green Sukuk Initiative workstream, including Green Sukuk training and technical assistance to the Municipal Green Sukuk Project in Türkiye.
GIFIIP’s Green Sukuk training provides potential Green Sukuk issuers, capital market regulators and supervisory authorities with a fundamental understanding of Sukuk and the Green Sukuk legal framework. The training has previously been held in Pakistan, Indonesia, Morocco, Türkiye and Kuwait.

UNDP ICPSD, through the GIFIIP Green Sukuk Initiative and in collaboration with local partners, also provides technical assistance to the Municipal Green Sukuk Project in Türkiye. This Green Sukuk will be issued based on the Istisna Sukuk structure and the funds raised from this issuance will be used for a solar energy project.

For more information about the GIFIIP Green Sukuk Initiative: https://gifiip.org/service/green-sukuk-intiative/

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