IslamicFinance.de

In #Nigeria about $300 billion (N108.75 trillion) is required to close the country's infrastructure gap. To close the gap, the Federal Government has turned to the Islamic Development Bank (IsDB). Some financial analysts are warning that this is capable of undermining the nation’s constitution and its secularity. While insisting on the need to defend Nigeria’s secularity, some of them pointed out that there are other viable options and numerous non-religious lending institutions Nigeria can turn to for help. For example, public affairs analyst, Barr Obiora Akabogu, said Nigeria could fall back on the Sovereign Wealth Fund (SWF) to raise cash. Nigeria’s pension fund, which stood at N6.02 trillion as at last November, is another viable option to build infrastructure. Others have recommended the Public-Private Partnership (PPP) model for designing, building, financing and operating new infrastructure.

According to Moody's Investors Service, Islamic Development Bank's (IsDB) credit strengths include a strong capital base, prudent financial and risk management policies. The bank's liquidity level is solid, which supports its Aaa rating and stable outlook. Moody's analyst Mathias Angonin said the weighted average rating of IsDB's shareholders is lower than other Aaa-rated development banks, but its 57 members are strongly committed to the organisation. This support is reflected in continued capital increases. The bank's paid-in capital rose to ID 5.1 billion at end-2016, from ID2.7 billion in 2007, and an additional ID 2.4 billion is expected over the next 10 years. Credit challenges include a risky operating environment as well as lower oil prices and the risks from geopolitical tensions. Nonetheless, its operational assets continue to perform well, with a very low level of impairment.

Nigeria may become the regional operational hub of the 43-year old Islamic Development Bank (IsDB) in Africa. IsDB is considering a proposal to expand its existing country gateway office in Abuja to serve as a key regional office. The office will coordinate the operations of the Bank in its West and Central African member-countries. According to the Ministry of Finance, the Abuja gateway office will serve Nigeria, Gabon, Niger, Mozambique, Burkina Faso, the Republic of Cameroon, Uganda, Senegal, Djibouti and Guinea Bisaau, among others. IsDB President Bandar Mohammed Hajjar said the Bank would enhance the development impact of its projects through comprehensive development solutions that integrate services and products in its member-countries.

Winner of the 2016 Islamic Development Bank (IsDB) Prize in Islamic Banking Prof. M. Kabir Hassan has said that Islamic finance could play a bigger role on the global stage especially towards achieving the Sustainable Development Goals (SDGs). This can be achieved through profit-and-risk sharing entrepreneurship, home financing and Islamic social finance instruments of Zakat, Awqaf, and Sadaqah. According to Prof. Hassan, research has proven that the Islamic financial system operates more efficiently and with greater stability. However, he added that for Islamic finance to play its role successfully there is the need to maintain its original binding principles. Prof. Hassan urged regulators to monitor Islamic financial products to ensure that they meet the criteria of maintaining justice. He also urged the IsDB to make available comprehensive and credible Islamic finance data for the use of all industry stakeholders.

The Islamic Development Bank (IsDB) had agreed to provide USD 500 million loan to part-finance the USD 15 billion Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline project.
IsDB has expressed interest in financing the project not just on Turkmenistan's territory, but in Afghanistan and Pakistan, too. The TAPI pipeline will have a capacity to carry 90 million standard cubic metres a day gas for 30 years. The project had been planned to become operational in 2018, but it is unlikely to see the light of day before 2022. The four nations to the project in April this year had signed an investment agreement in Ashgabad. The technical study of the TAPI project, done by Penspen, has estimated that it will take over six years to complete from the start of the FEED process.

The Islamic Development Bank (IsDB) has successfully priced a $1.25 billion, five-year Sukuk under its $25 billion Trust Certificate Issuance Programme. The Sukuk was priced at par at 2.263%, to be payable on semi-annual basis. This issuance marked the Bank’s second benchmark issuance in 2016. In terms of the final allocation, the distribution was well diversified with 72% allocated to the Middle East and North Africa (MENA) region, 25% to Asia and 3% to Europe. Central banks and official agencies were allocated 90% followed by 10% to banks. IsDB’s CFO Ahmet Tiktik thanked the member countries and expressed his hope that this funding will continue to support their developmental needs.

The Islamic Corporation for the Development of the Private Sector (ICD), a development finance institution of the Saudi Arabia-based Islamic Development Bank (IsDB) and the Caisse des Dépôts et Consignations Deposit (CDC), a financial institution backed by the government of Gabon, recently announced that they have signed a memorandum of understanding for the creation of a private equity fund to support small and medium-sized enterprises (SMEs) in Gabon and elsewhere in Central Africa.The goal of the fund is to foster the growth of SMEs that have been ill-served by banks and thus to grow the region’s economy as a whole.
As of October 13, 2015, ICD reported total assets of USD 1.7 billion and annual income of USD 97 million. No financial information for CDC is available. CDC has a balance sheet of XAF 195 billion (approximately USD 315 million).

A visiting team from the Islamic Development Bank (IsDB) met Guyana's officials from the Ministry of Communities and the Central Housing and Planning Authority (CHPA) on Friday. Minister of Communities, Ronald Bulkan said the government recognises housing as a major public policy issue. He disclosed that the initial focus is the construction of 5,000 apartment units as part of medium terms plans to deliver 10,000 units to eligible Guyanese. He expressed optimism that components of the housing program will be included in Guyana’s eventual submission to the IsDB. IsDB's Director of Country Programs Department, Mohammad Alsaati, said that the bank was seeking for specific projects that can be undertaken in the near future and will work with the local stakeholders to develop worthwhile business opportunities.

The Lives and Livelihoods Fund (LLF) was officially launched on Thursday. It was first announced two years ago by Microsoft founder Bill Gates and is now supported by the Islamic Development Bank (IsDB), the Islamic Solidarity Fund for Development (ISFD), Qatar, Saudi Arabia, and the United Arab Emirates. The decision-making body approved projects worth $363mn for the first of the five years that the fund will be operational. These projects will be primarily in the Middle East and several Islamic and African countries. The funds will be used to protect communities from the risk of malaria and HIV/Aids, increase access to water and primary healthcare, and empower poor farmers to grow more food. Administered by the IsDB, the fund combines $2bn of IsDB financing with $500mn in grants from donors.

The Islamic Development Bank wants to launch a dollar-denominated sukuk. The sukuk is expected to be launched after the completion of its fixed income investor meetings in the Middle East, Asia and Europe.

The government is keen on improving the lives of Filipino Muslims and efforts on this are expected to have more meaningful results as the government starts talks with the Islamic Development Bank (IsDB).