ICD plans regular taps of Islamic debt capital markets, says CEO

JAKARTA / Reuters

The private sector arm of the Islamic Development Bank Group plans to regularly tap Islamic debt capital markets and expects to arrange two sovereign deals later this year, its chief executive said.
Regular access to Islamic financing tools such as Islamic bonds, or sukuk, is helping the Jeddah-based Islamic Corporation for the Development of the Private Sector (ICD) expand its economic development efforts.
Last month, the AA-rated ICD completed a debut sale of $300 million worth of five-year sukuk.
It has also completed two private placements this year with a further transaction planned in coming months, chief executive Khaled Al-Aboodi said on the sidelines of the annual meeting of the Islamic Development Bank being held in Jakarta.
The ICD has helped arrange sovereign sukuk deals for Senegal and the Ivory Coast worth a combined $500 million, part of plans to arrange a combined $2 billion worth of sukuk by 2019.
Two more sovereign deals are expected this year
from West African countries
as sukuk gain traction across the region, in particular
to finance infrastructure
projects, he added.
ICD is also taking strategic stakes in a number of financial institutions to help serve as an extension of its activities, Al-Aboodi said. In March, the ICD made a 10 percent equity subscription worth $20 million in Al-Arafah Islami Bank Limited in Bangladesh.
Established in 1999, the ICD is on track to complete a capital increase that will eventually double its paid up capital to $2 billion.
Financial commitments from the capital increase will begin next year and continue over a four year timeframe, with the ICD open to an additional capital increase as part of a 10-year strategy, Al-Aboodi said.