According to a study by the United Nations Environment Programme and DBS, the demand for additional ASEAN green investment from 2016 to 2030 is valued at an estimated USD$3 trillion. Malaysia’s leadership in green infrastructure finance would be a key element in attracting investment capital to fund sustainable development in the region.
Tan Sri Ranjit Ajit Singh, Chairman of the SC said, “Innovations in the use of Islamic financial instruments can go a long way in supporting sustainable development. In line with rising demand, the SC continues to facilitate the development of the ecosystem and products that meet the requirements of both SRI and Islamic finance, ensuring the capital market serves the needs of investors and issuers.”
He added, “This collaboration with international bodies such as the World Bank and IOSCO helps build relevant expertise and capacity in the market and promotes the sharing of best practices in the development of sustainable financing.”
Richard Record, Acting Country Manager for the World Bank’s Global Knowledge and Research Hub in Malaysia, said, “The pioneering issuances of green Sukuk in Malaysia demonstrate the substantial potential of deploying Islamic finance instruments to support the green agenda. This was accomplished through the partnership between the World Bank’s Malaysia Hub, the Malaysian government and other stakeholders. We intend to build on these accomplishments to foster the use of such instruments to finance sustainable development and build resilience to climate change and natural disasters in our client countries”.
To further encourage green sukuk issuances, the SC recently established the Green SRI Sukuk Grant Scheme which helps to offset the additional cost of an independent review, also known as a second opinion, which certifies a debt instrument as meeting green criteria. The grants are open to both domestic and foreign companies in any currency, provided the sukuk are issued in Malaysia, with grants being tax-exempt provided applications are received before December 2020.
SECURITIES COMMISSION MALAYSIA
WORLD BANK GROUP
IOSCO ASIA PACIFIC HUB