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Friday, September 30, 2022

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Infracorp issues Bahrain’s first green Sukuk worth US$900 million

Infracorp has issued Bahrain’s first green Sukuk on the 15th March 2022 worth US$900 million. The perpetual Sukuk facility has been listed on the London Stock Exchange on the 27th March 2022. Infracorp will use the proceeds to develop projects and assets promoting the transition toward low-carbon, climate change-resilient and environmentally sustainable economies.

The Sukuk issuance is based on the Mudarabah concept where Infracorp Sukuk, the trustee, is the provider of funds (Rab Al Maal) while Infracorp is the investment manager (Mudarib). The trustee channels funding to Infracorp for green projects.

While the Sukuk facility is perpetual, it features a call option whereby Infracorp Sukuk can redeem all of the Sukuk certificates at 100% of its outstanding face amount in addition to any outstanding payments.

“This Sukuk will enable positive and sustainable impact on the infrastructure development sector across the Gulf, North Africa and South Asian regions and is a response to the market’s appetite for opportunities that generate returns [and] also in addition to participating in leaving a significant and tangible ESG impact,” said Hisham Alrayes, the chairman of Infracorp.

Infracorp was spun out by GFH Financial Group, which acted as the sole lead manager for the Sukuk, in January 2022 to manage a portfolio of investments valued at approximately US$3 billion focusing on accelerating growth and development of sustainable infrastructure assets and environments across the Gulf and global markets.

Under the company’s green Sukuk framework, green projects include green building projects involving the acquisition, construction or refurbishment of buildings which meet recognized standards; energy efficiency projects involving the investment in technologies, products or systems that will result in an at least 20% improvement in energy efficiency; and renewable energy projects involving the generation or procurement of energy from solar and wind to power new buildings.

Infracorp Perpetual Green Sukuk

15th March 2022
Summary of terms and conditions
Issuer
Infracorp Sukuk
Size of issue
US$900 million
Purpose
To develop projects and assets promoting the transition toward low-carbon, climate change-resilient and environmentally sustainable economies
Tenor
Perpetual
Issuance price
100%
Profit rate
4% (projected)
Payment
Semi-annual
Currency
US dollar
Maturity date
N/A
Lead manager(s)
GFH Financial Group
Delegate(s)
Citibank London branch
Governing law
Bahraini law (Mudarabah agreement governed by UK law)
Legal advisor(s)/council
• Allen & Overy, legal advisor to the sole lead manager and the delegate as to English law
• Hassan Radhi & Associates, legal advisor to the sole lead manager and the delegate as to Bahraini law
• Walkers (Dubai), legal advisor to the trustees as to Cayman law
Islamic structure
Mudarabah
Listing
London Stock Exchange
Face value/minimum investment
US$200,000 and integral multiples of US$1,000 in excess thereof

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