The Islamic Development Bank (IDB) said it will raise the current ceiling of the bank's medium-term sukuk issuance program from $10 billion to $25 billion. The bank's executive directors approved the increase during the company's annual meeting, which began in the Mozambique capital of Maputo on Sunday, according to a statement issued by the bank on Tuesday. Sukuk is a financial certificate, like a bond, that complies with Islamic religious law by avoiding interest payments.
"On this occasion, the board of executive directors commended the huge success generated by this program 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 statement read. "The bank has decided to reintroduce its medium-term sukuk issuance program that 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 Jeddah-based bank issues Islamic bonds around the world. The international lender aims to contribute to the social and economic development of member countries and Muslim communities individually in line with the principles of Islam and Islamic law.
The AAA-rated IDB said that the $10 billion sukuk program has 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 financial institutions," the bank said. The bank also approved several development projects in member countries and some Muslim communities in non-member countries amounting to $450 million. Moreover, the IDB and the Bill and Melinda Gates Foundation - the world's largest private foundation with a $40 billion endowment that aims to tackle disease and poverty in developing nations - signed an agreement for a Lives & Livelihoods fund to raise $500 million over the next five years, IDB President Ahmad Mohamed Ali announced. Each will contribute $100 million and the remaining $300 million will come from donors and partners.