Khazanah launches sustainable and responsible investment sukuk

Khazanah Nasional, the strategic investment fund of the Government of Malaysia, has successfully launched the Sustainable and Responsible Investment (SRI) sukuk today.

This reaffirms Malaysia’s commitment into sustainable investments using Islamic finance as the tool to achieve this.

The SRI sukuk raised RM100 million from the second tranche and proceeds will be used to build more schools under the Trust Schools Programme.

The Islamic paper, nicknamed “Sukuk Ihsan” is issued by a Special Purpose Vehicle (SPV): Ihsan Sukuk Berhad.

Khazanah issued the first tranche of sukuk Ihsan of RM100 million in 2015, under its RM1.0 billion sukuk programme.

The second tranche was launched on 13 June 2017.

Proceeds from this second tranche will fund Yayasan AMIR’s (YA) Trust Schools Programme to build at least 20 schools.

YA is a not-for-profit foundation incorporated by Khazanah to improve accessibility of quality education in Malaysian Government schools through a Public-Private Partnership with the Ministry of Education.

As of June 2017, the Trust Schools Programme has been rolled out to 83 schools across ten states, positively impacting over 65,000 young Malaysians.

In an exclusive with Astro AWANI, PRI chair Martin Skancke spoke on why countries like Malaysia must do it.

PRI is a United Nations-backed organization on the philosophy of SRI investments.

Martin said profits and sustainable investments does not just ‘coincide', it is essential and complementary to each other”.

“If you want profits to remain sustainable, the investments that you do must directly be sustainable as well” Martin added.

Members of the public who were unable to subscribe to the SRI Sukuk can still support the Trust Schools Programme through crowdfunding platforms on ATAPlus (http://ata-plus.com/deals/KhazanahSRI) and pitchIN (http://reward.pitchin.my/project/KhazanahSRI ).

The platforms will be open until 13 August 2017.

The structure of the SRI Sukuk is in accordance with the Islamic principle of Wakalah Bi Al- Istithmar.

CIMB Investment Bank Berhad (“CIMB”) is the sole Lead Arranger, while CIMB, Maybank Investment Bank and RHB Investment Bank are the Joint Bookrunners and Joint Lead Managers for this SRI Sukuk transaction.

The settlement date of the SRI Sukuk will be on 8 August 2017.