Sharm El Sheikh: The Islamic Development Bank (IsDB) and the Arab Coordination Group (ACG) are contributing to funding to support climate action efforts in the region. Funders have committed to investing USD 24 billion by 2030. Hani Sonbol, CEO of the International Islamic Trade Finance Corporation (ITFC) (pictured above), one of the institutions affiliated with the IsDB, spoke with ANBA at the United Nations Conference on Climate Change (UNFCCC COP27), taking place in Sharm El Sheikh, Egypt.
Sonbol revealed funding programs are currently under preparation in cooperation with different international and regional Arab development agencies. These initiatives aim to support and finance green infrastructure projects in light of current global challenges related to climate change.
The executive said the IsDB is always committed to supporting member countries in meeting development challenges, bringing their economies back on track, and providing necessary and appropriate financing to their needs. According to him, the bank has put food security, energy, and climate change at the top of its priorities.
The bank and all of its affiliated institutions, including the ITFC, the Islamic Corporation for the Development of the Private Sector (ICD), and the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), are proposing possible solutions to help countries mitigate the adverse effects of climate issues. It also supports investments in green projects in the public and private sectors.
IsDB’s priorities
Sonbol stressed the ITFC would focus, in the next period, on financing green projects through the issuance of green sukuks. Sukuks are financial securities operated under Sharia, Islamic law.
Projects that aim to achieve carbon neutrality and ecologically sustainable projects will also receive support and funding. The corporation will also provide advisory services to member countries to help them adapt to climate change and mitigate its harmful effects.
He highlighted IsDB had decided that green finance would become an essential part of the financing portfolio made available to the 57 member countries, especially as each has its own programs and systems related to different ways of coping with climate change.
Food security and COVID-19
According to Sonbol, the bank has already presented initiatives for which around USD 10 billion have been allocated to support food security programs. About USD 2.3 billion has also been assigned to aid programs for member countries during the COVID-19 pandemic.
He added negotiations are underway with the government of Egypt for the issuance of green sukuks and other different financing programs, intending to contribute to the financing of major projects in the country.
Translated by Georgette Merkhan & Elúsio Brasileiro
