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Saturday, May 25, 2024

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Bahrain welcomes first green Sukuk worth US$900 million; lists on London Stock Exchange

Bahrain has joined green/sustainable Sukuk issuers, notably Indonesia and Malaysia and corporates from Saudi Arabia and the UAE as well as the IsDB, with the first green Sukuk out of the Kingdom, issued by Islamic banking powerhouse GFH Financial Group.

The US$900 million Islamic paper was closed by Infracorp, the infrastructure and sustainability arm of GFH that focuses on sustainability investments and social infrastructure developments.

The Sukuk facility has also been listed on the London Stock Exchange.

“This landmark transaction reflects Infracorp’s strategy to accelerate growth of sustainable infrastructure development across MENA and South Asia regions while generating long-term returns for investors and adding lasting value to communities,” GFH said.

Hisham Alrayes, the chairman of Infracorp, also added that the Sukuk issuance is a response to the market’s appetite for opportunities that not only generate returns but also leave a significant ESG [environmental, social and governance] impact.

“With green Sukuks growing by more than 17% year-on-year in 2021 to US$15 billion and expected to remain a key theme of the Islamic finance market in 2022, Sukuk issuance activity is expected to stand between US$160 and US$170 billion in 2022, according to Moody’s. We therefore anticipate a growing investor appetite for ESG and for green Sukuks throughout the ongoing economic headwinds,” Hisham added.
Infracorp was officially launched by GFH in January to manage a portfolio of infrastructure assets and developments valued at around US$3 billion.

The company focuses on investments that develop communities, logistics and technologies that support sustainability and renewables, and social infrastructure assets across the education and healthcare sectors.

GFH also early this year successfully closed its acquisition of Khaleeji Commercial Bank, which is currently working on separating and transferring its infrastructure and real estate assets worth a total of US$200 million in exchange for equity and Sukuk in Infracorp.

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