Malaysia will issue more green sukuk to finance environmental-friendly infrastructure projects, in a move to bolster its position as the key driver in the green Islamic financial market, as reported in The New Straits Times.
Green sukuk are Shariah-compliant investments in renewable energy and other environmental assets. The proceeds are used to finance construction, refinance construction debt, or finance the payment of a government-granted green subsidy.
Energy, Green Technology and Water Minister Datuk Seri Dr Maximus Johnity Ongkili said that, with a conducive funding ecosystem, the government is confident it can achieve its renewable energy generation target of 7,200 megawatts (MW) by 2020, with solar energy contributing 2,080MW to it.
“We are capable to raise the nation’s energy output via solar through various initiatives—the Feed-in Tariff (FiT), large scale solar (LSS) programme and Net Energy Metering,” added Maximus.
“These initiatives can fulfill the country’s commitment to reduce its green house gas emission as stipulated under the Paris Agreement made in 2016.”
Maximus was speaking at a 11 Oct document-exchange ceremony between Tadau Energy Sdn Bhd and Quantum Solar Park Semenanjung Sdn Bhd on green sukuk funding for two large-scale solar projects under the LSS programme, which was introduced in 2015.
In July 2017, Malaysia, through Tadau Energy, issued the world’s first green sukuk—RM250 million Sustainable Responsible Investment (SRI) sukuk—to finance the construction of an LSS project in Kudat, Sabah.
Quantum Solar, meanwhile, announced the world’s largest green SRI sukuk issuance of RM1 billion recently. The wholly owned special-purpose vehicle of Quantum Solar intends to raise money to fund a portfolio of three large-scale solar photovoltaic (PV) plants in Gurun, Kedah, Jasin in Melaka, and Merchang, Terengganu.
The projects are expected to create up to 3,000 jobs, generate electricity for up to 93,000 households and reduce carbon emissions by 210,000 tonnes annually. — Construction+ Online