A number of GCC governments, including those in the UAE and Saudi Arabia, have set ambitious clean energy and energy efficiency targets. As the fastest growing region in the world, the GCC’s population is expected to grow more than 53 million by 2020. Substantial amounts of investments will be required to finance the clean energy and energy efficient projects necessary to meet the needs of the future population.
Capital markets allow investors a low-cost alternative
Green bonds, which tie
The Sukuk Opportunity
Total Sukuk issuances for 2013 stood at approximately US$120 billion and the Sukuk market is likely to sustain double-digit growth in the coming two to three years with assets in Islamic finance expected to reach US$2.8 trillion by 2015.
The growth of the Sukuk market has allowed investors to diversify their portfolio and invest in credit that they would not otherwise have access to, such as Islamic institutions, which only raise funds in a Shari’ah-compliant manner. The
Over the last 12 months, structured finance transactions in the Middle East (both Islamic and conventional) have seen increased use of a comparatively new and previously underutilized type of special purpose vehicle (SPV) – the DIFC special purpose company (SPC).
An SPC is a private company limited by shares incorporated under the laws of the Dubai International Financial Centre (the DIFC), a financial free zone located in the Emirate of Dubai with its own body of law and regulations and
Sipchem’s recent Mudaraba Sukuk is notable as an economic success and also for its structure. The financing represented a great addition to the tool kit available to corporate treasurers in Saudi Arabia.
A Sukuk financing typically requires that: