MAPUTO, Republic of Mozambique
The Islamic Development Bank (IDB) said on Tuesday that it will raise the current ceiling of the bank medium-term sukuk issuance program from $10 billion to $25 billion.
Sukuk is a financial certificate, like a bond, which complies with Islamic religious law by avoiding interest payments.
The bank's executive directors approved the increase in a company annual meeting, which began in the Mozambique capital of Maputo on Sunday, according to a statement issued by the bank on Tuesday.
"On this occasion the Board of Executive Directors commended the huge success recorded by this programme in all its previous issuances since it began in 2003. This is a reflection of the high status and confidence the Bank continues to enjoy in the international financial arena," the bank said in a statement.
"The Bank has decided to reintroduce its medium term sukuk issuance programme which is in line with the provisions and principles of the Islamic Sharia, with the aim of mobilizing and injecting new financial resources from the international money market to meet the growing development needs in member countries," the statement added.
The Jeddah-based Islamic Development Bank issues Islamic bonds around the world. The international lender aims to contributes to the social and economic development of member countries and Muslim communities individually in line with the principles of Islam.
The AAA-rated Islamic Development Bank said that the $10 billion, which are part of the bank’s sukuk program, have been used to finance various development projects in member countries, particularly infrastructure projects.
"This is at a cost that is much lower than what it would have cost if they were financed through regular financing institutions," the bank said.
The bank also approved participation in several development projects in member countries and some Muslim communities in non-member countries amounting to $450 million.
Moreover, IDB and Bill and Melinda Gates Foundation signed an agreement for a Lives&Livehoods fund to raise $500 million over next five years, the bank's president Ahmad Mohamed Ali announced.
Each will contribute $100 million and the remaining $300 million will come from other donors and partners.
The Bill and Melinda Gates Foundation, the world's largest private foundation in the world with a $40 billion endowment, aim is to tackle disease and poverty in the developing nations.
