IslamicFinance.de

The green bond industry has achieved phenomenal growth since its beginning in 2007. Today, leading corporations in various sectors tap into green bonds to raise funding. Toyota revolutionised the green bond market by introducing the auto industry’s first-ever AssetBacked Green Bond in 2014. In May 2016, the London Taxi Co issued a US$400 million (RM1.56 billion) green bond to finance projects, enabling the production of zero-emission-capable vehicles. The first green sukuk was issued in July 2017 by Tadau Energy, with an issuance of RM250 million Green SRI Sukuk to finance a large-scale solar project. Subsequently in October 2017, Quantum Solar Park Malaysia issued its green SRI sukuk worth RM1 billion to finance the construction of three large-scale solar photovoltaic plants. The green sukuk market is expected to grow further in 2018 and beyond. However, the sukuk industry will have to face a twofold challenge. Firstly to convince the issuers to adopt the Shariah-compliant route, secondly to achieve critical mass for the green sukuk market in order to achieve optimal costs of issuance and enable a liquid secondary market trading.