President, Islamic Development Bank (IDB), Bandar Hajjar said Monday that the organization will soon launch a $2.5 billion sukuk bond.
At a briefing at the London Stock Exchange, the President said the IDB’s funding plan for first half 2018 was the largest since the bank’s inception and the sukuk’s proceeds would support spending on infrastructure, education, and health.
He said the IDB; the largest development organization in the Muslim world is also planning to set up a $500 million fund to support science and technology start-ups.
The Jeddah-based multilateral development bank is a regular issuer of international Islamic bonds, which it raises to fund its business activities, but also to promote the international sukuk market by building a liquid sukuk yield curve.
Report by Reuters showed that organization recently hired banks as joint lead managers and book runners for a new U.S. dollar-denominated sukuk. The banks are CIMB, Citi, Emirates NBD Capital, Gulf International Bank, HSBC, NATIXIS, SMBC Nikko and Standard Chartered Bank.
IDB is meeting fixed-income investors in London this week ahead of a potential five-year debt sale. It is also considering issuing a 10-year sukuk, the report said.
On the sidelines, Hajjar said he envisaged to signing a memorandum of understanding with the China-led Asian Infrastructure Investment Bank (AIIB) soon, on joint investing in Africa.
“A collaboration and cooperation with the Chinese and others to finance infrastructure mainly – roads, transportation, energy and other – is very important,” he said, adding: “So we are going toward this direction and then planning to visit them there and also to sign MoU (memorandum of understanding) with the Chinese bank in order to cooperate, especially in Africa.”
He refused to give further details on the timing and size of the cooperation but said it would target the 26 poorest countries on the continent.
