IslamicFinance.de

Islamic Development Bank (IDB) has approved $987 million in funds for supporting economic and social development projects and programmes in its member countries, in addition to grants for Muslim communities in non-member countries. The funds approved by the IDB's Board of Executive Directors at a recent meeting include $176 million for Oman, $100 million for Uzbekistan, $179.3 million for Cameroon, $26.7 million for Lebanon, $20 million for Yemen and $10 million for Uganda. Egypt alone received $198 million for the development of develop Assiut Oil Refinery and $226,8 for the development of Sharm El Sheikh International Airport, from IDB's latest funds.

The government of Bangladesh has signed a Tk 340 crore ($44 million) loan contract with Islamic Development Bank to install the second submarine cable for the country. The installation may complete by 2016, while Bangladesh entered a consortium in March this year. Monwar Hossain, managing director of Bangladesh Submarine Cable Company Ltd (BSCCL), said BSCCL has already paid $19.2 million to the consortium from its own fund. Bangladesh will have to spend a total of $72.5 million for the new cable. The IDB will provide $44 million, while BSCCL will spend $70 million from its own fund. The rate of interest for the loans will be LIBOR+1.35 percent and the loans will have to be repaid in 13 years.

Islamic Development Bank (IDB) issued $1 billion in five-year Islamic bonds, or sukuk, earlier this month, the largest ever privately-placed transaction from the supranational institution. The sukuk was priced on July 17 and carried a 1.8118 percent coupon at issue, underwritten by the IDB itself. The deal follows a $100 million three-year private placement in April and a $1.5 billion five-year sukuk in February, the largest ever public issuance from the multilateral lender. IDB usually prints one public transaction a year, with plans to issue a benchmark-sized - around $500 million - sukuk around May of next year.

The Government of Kyrgyzstan and the Islamic Development Bank (IDB) started elaboration of joint projects. The First Vice Prime Minister of the Kyrgyz Republic Taiyrbek Sarpashev held a working meeting on implementation of the agreements, reached at the end of a working visit to Saudi Arabia. He stressed that with the leadership of the IDB signed agreements for projects totaling $46.570 million. For improvement of energy supply of Arkinsky array of Lyailyak district of Batken province $16.25 million will be allocated. For the reconstruction of Osh - Batken - Isfana highway - $21,320 million. For sustainable rural development in the Kyrgyz Republic - $9 million.

The Islamic Development Bank (IDB) Group announced the launch of the US$2 billion Islamic Development Bank Infrastructure Fund II (the IDB Fund II), on the occasion of the 40th anniversary of the IDB. The IDB Fund II will have a broad sectorial focus beyond core infrastructure sectors of power, telecommunications, transportation, and will include investment in oil and gas, refinery and petrochemicals, steel and aluminum, mining, logistics and an allocation for healthcare, education, and financial services. Its several founding investors have aggregate commitments totaling US$750 million for the first closing.

The Ghana Islamic Microfinance, the first Shariah-compliant financial institution in Ghana, is to receive the Women’s For Development Award 2014 from the Islamic Development Bank. The award will be presented to the financial institution at an event of the Board of Directors of the Islamic Development Bank, taking place in Jeddah, Saudi Arabia from June 22 – June 26. Ms Suwaiba Mohammed Amin, the Programmes Manager of Ghana Islamic Micro-finance said the aim of the financial institution is not to bring Shariah law to Ghana but to use its principles to promote ethical financing and fight against the exploitative loans currently going on in the country.

The Islamic Development Bank Group is holding its Annual Meeting in Jeddah, Saudi Arabia, from 22-26 June 2014 and celebrating the IDB’s 40th Year Anniversary. The meetings will be attended by finance and economy ministers of the (56) member countries and more than 1,000 delegates. The Annual Meeting of the IDB Group will take place over a five-day period in conjunction with sub-meetings. Meanwhile, on the occasion of the 40th Anniversary of the IDB Group, a number of events will be held including a forum titled “Fostering Dynamic Ecosystems in Developing Economies”, which will be held on June 23, 2014. In addition, an exhibition on innovation will be held alongside the Annual Meeting, with more than 40 innovative projects and solutions from 19 member countries.

Fitch Ratings has affirmed the Islamic Development Bank's (IDB) Long-term Issuer Default Rating (IDR) at 'AAA' with a Stable Outlook and its Short-term IDR at 'F1+'. The affirmation and Stable Outlook reflect the following key rating factors: IDB is one of the strongest-capitalised multilateral development banks rated by Fitch, with an equity-to-assets ratio of 54% and a debt-to-equity ratio of 79.5% at end-1434H (3 November 2013). Credit risk remains moderate, other risks are manageable. Profits are moderate compared with commercial banks, but are steady and in line with peers, ensuring regular equity strengthening. Shareholder support, a secondary rating driver, remains strong.

The Islamic Development Bank has launched a programme to release $180 million in financing to six African countries for renewable energy projects. The new initiative, called Renewable Energy for Poverty Reduction, will target projects over the next three years to improve access to electricity in Africa's rural areas. Around $125 million have been committed by the bank and initial talks with potential partners such as the OPEC Fund for International Development have started to secure the rest. The initiative will focus on West Africa and projects in Burkina Faso have already been approved. Projects such as mini-grids and rooftop solar systems for Mali, Senegal, Niger and Nigeria are likely to follow and a sixth African country not yet determined.

The Islamic Development Bank (IDB) plans to issue a benchmark-sized Islamic bond in around May next year, the bank’s President Ahmad Mohamed Ali said. In February, AAA-rated IDB already priced a $1.5 billion, five-year sukuk. The new issue will reportedly be close to this year’s issue. Besides, IDB is considering whether to guarantee Tunisia’s proposed 700 million dinar ($431.79 million) debut sukuk. The Tunisian issue is aimed at helping the North African economy recover after being hit by the 2011 uprising. Moreover, IDB’s insurance arm, the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), is also debating whether to extend a sukuk insurance product to boost the credit rating of Tunisia’s sukuk.

The Islamic Development Bank's (IDB) Board of Executive Directors has approved new fundings totalling $670.9 million for development projects in member and non-member countries. The Executive Directors approved $312.8 million to finance electricity projects in Egypt and Senegal; $110 million to fund the development of a major road in Uganda; $48 million to fund pearl preservation and economic revival projects in Bahrain; $44 million for an underwater communications cable in Bangladesh; and $12.4 million to finance fish farms in Mozambique. Moreover, the executive directors gave their approval for four donations for Muslim communities in non-member Bosnia-Herzegovina, Cambodia, India and Thailand while funds will also be channelled into development projects in Africa.

International law firm Simmons & Simmons and the Kyrgyz Republic have signed an agreement to provide consultancy services for the development of laws and regulations, supporting the introduction of Takaful and Sukuk in the Kyrgyz Republic. The consultancy services to be provided by Simmons & Simmons are to be funded under a technical assistance grant provided by the Islamic Development Bank (IDB). First Vice Prime Minister of the Kyrgyz Republic, HE Tayirbek Sarpashev, noted that upon the signing of this Agreement, the Government expects the economy to attract large investments that will favourably affect the development of the financial market and banking sector. The Simmons & Simmons team is led by Muneer Khan, assisted by managing associate Tariq Hameed.

Saudi Arabia-based Islamic Development Bank is seeking to boost trading in Shariah-compliant products by opening an office in Malaysia. The Islamic Cooperation for the Development of the Private Sector, a unit of IDB, got a license in February from the Southeast Asian nation’s central bank to start offering Islamic investment products in Kuala Lumpur. It will focus on money- market instruments, foreign exchange and sukuk, chief executive officer Khaled Mohamed Al-Aboodi said. It has hired two traders and will also act as an intermediary for business between Asia and the Middle East, he said. Islamic Cooperation plans to increase the team in Kuala Lumpur as and when needed, said Al- Aboodi. The recruits are now working on developing the infrastructure and building relationships with other banks in the region.

BLME, Europe's largest Islamic bank, has been selected to co-lead the Islamic Development Bank (IDB) US$1.5 billion five-year Sukuk. The bank's representative office in Dubai was appointed in to handle the issuance. DB Sukuk is the largest ever Islamic bond issued from the AAA rated supranational lender in 2014. It is also the largest Sukuk issuance BLME has been appointed to act as co-lead manager on to date. The IDB issued 16 Sukuk in London since 2005 which raised around US$7 billion. It has a US$ 313 million programme listed in Malaysia and has raised 700 million ringgit since 2008 via three Sukuk. BLME listed on NASDAQ Dubai in October 2013, and announced a strong performance for the full year on 3rdMarch 2014.

The Islamic Development Bank (IDB) has approved $515.6 million to fund several socioeconomic development projects. The funds consist of $490 million for the energy sector, divided into $220 million for a power plant project in Pakistan, $90 million for a similar project in Morocco, $83.4 million in Senegal, $60 million for power plant expansion in Mauritania, and $36 million for rural electrification project phase II in Cameroon. The education sector received $17.8 million consisting of $7.5 million for a project in Burkina Faso, and $10.27 million for Suriname. In the transport sector, the Board approved a $6 million technical assistance loan to the Republic of Niger. IDBs Waqf Fund had approved $780,000 as a grant for Muslim communities in non-member countries for educational projects in Bosnia and Herzegovina, Burundi, India and Malawi.

The Islamic Development Bank (IDB) Group and the Republic of Chad have signed an agreement worth 3.14 million US Dollars to support a dual Arabic-French education development project in the first level of secondary education. The project will be financed through a loan from the IDB and the Islamic Solidarity Fund for Development affiliated to the IDB. The agreement was signed by the Chairman of the Islamic Development Bank, IDB, Group, Dr. Ahmad Mohamed Ali, and Mariam Mohamed, Minister of Economy, Planning and International Cooperation and Governor the Islamic Development Bank branch in Chad. The meeting discussed relations with the IDB Group and ways of boosting them and the features of the programme of the strategic partnership between the two sides, which will be launched soon.

The Islamic Development Bank has launched a $1.5 billion, five-year sukuk issue which will price shortly. The transaction, the AAA-rated lender's first in 2014, will price at a spread of 23 basis points over midswaps. Pricing is inside the guidance given by lead managers on Tuesday, which indicated that a benchmark-sized sukuk would price in the mid-to-high 20s over the same benchmark. Benchmark-sized is traditionally understood to mean in excess of $500 million. The banks arranging the transaction are CIMB, Commerzbank, First Gulf Bank, HSBC, Natixis, National Bank of Abu Dhabi and Standard Chartered.

The Islamic Development Bank aims to issue its first short-term sukuk this year, and is studying how it might start to guarantee Islamic bond issuance by member countries. A lack of short-term paper has been a significant constraint on the development of Islamic finance globally. The Malaysia-based International Islamic Liquidity Management Corp began trying to fill that gap last year with issues of three-month sukuk; it now has $1.35 billion outstanding. The IDB hopes to join the IILM in issuing short-term instruments this year. They could come in the form of 30-, 90-, 180- or 360-day sharia-compliant securities. The IDB is also looking to do longer tenors, however, the wider market isn't ready for longer-term Islamic bonds yet.

Islamic Development Bank is aiming to price a benchmark-sized Islamic bond issue on Thursday after releasing initial price guidance for a five-year deal. The supranational lender set initial guidance at mid-to-high 20s over midswaps. While no definitive size has been set for the issue, the first from the AAA-rated bank since May, it was expected to be benchmark-sized – which is traditionally understood to mean in excess of $500 million. The banks arranging the transaction are CIMB, Commerzbank, First Gulf Bank, HSBC, Natixis, National Bank of Abu Dhabi and Standard Chartered.

Islamic Development Bank’s top officials have traveled to Tehran to sign the contract with the Iranian officials for the first part of the 3 billion-dollar loan they had agreed before. The first part of the loan will be paid to a few cities in the Southern Iranian province of Fars for implementing sewage projects. But there are other areas for which the 3-billion-dollar loan will be used. So far, the IDB has allocated loans to Iran in railway, water sources, environment, automotive and other sectors. With almost ten percent of the shares, Iran is the third major shareholder of the bank. The ratification of Iran's parliament to increase the countrie's share in IDB is pending.