Saudi-based IDB plans infrastructure funds for Africa and Asia

Above, the Jeddah headquarters of Islamic Development Bank. (Reuters)
Updated 11 October 2018
0

Saudi-based IDB plans infrastructure funds for Africa and Asia

  • The new funds would help close a deficit in investments for projects across Africa and Asia
  • In Africa, there is an annual public gap in infrastructure investments that exceeds $87 billion

NUSA DUA, Indonesia: The Saudi-based Islamic Development Bank (IDB) plans to launch two funds focused on Africa and Asia next year, aiming to raise a combined $1 billion to help fill a gap in infrastructure investment among its member countries.
The plans from the IDB, the largest development organization in the Muslim world, follow the launch of a $500 million technology-focused fund in April of this year.
The new funds would help close a deficit in investments for projects such as transportation, energy and sanitation across the two regions, said Mohamed Nouri Jouini, vice president of partnership development.
“This is a new policy of the IDB in terms of putting a focus on thematic areas, whether its infrastructure, science and technology or other areas.”
The IDB estimates that in Africa, where more than half of its member countries are located, there is an annual public gap in infrastructure investments that exceeds $87 billion.
The bank is currently in discussions to attract financial contributions to the new funds and also for selecting external managers, Jouini said on the sidelines of the annual meetings of the International Monetary Fund and World Bank Group.
Most of the IDB’s funds have been managed internally, including its two flagship infrastructure funds, but the bank is aiming to attract external managers to help improve governance.


Maalem Financing raises $26m in debut sukuk

Updated 17 October 2018
0

Maalem Financing raises $26m in debut sukuk

  • The sukuk from Maalem, a shariah-compliant commercial and consumer financing firm, is a small but novel deal
  • The three-year unsubordinated deal was sold through a private placement and Maalem could tap the market again

LONDON: Saudi Arabia’s Maalem Financing has raised SR100 million ($26.6 million) from a debut sale of Islamic bonds, or sukuk, as the firm seeks to develop a crowdfunding product and expand its operations, a senior executive said on Tuesday.
The sukuk from Maalem, a shariah-compliant commercial and consumer financing firm, is a small but novel deal in a market that is dominated by issuance from sovereign institutions and Islamic banks.
The three-year unsubordinated deal was sold through a private placement and Maalem could tap the market again as early as January next year, said John Sandwick, a member of Maalem’s board of directors.
“The program is for SR500 million and with 3.6 times oversubscription, there seems to be a lot of demand,” he said.
Additional sales of sukuk aimed to raise between SR100 million and SR200 million, depending on market conditions, he said, adding that Maalem may consider a dollar-denominated sukuk issuance at a later stage.
The debut transaction used a structure known as murabaha, a cost-plus-profit arrangement commonly used in Saudi Arabia. The firm hoped to use an asset-backed structure for future deals, Sandwick said.
Established in 2009, Maalem received regulatory approval to operate as a non-real estate finance company in 2016 and increased its capital in 2017 to SR150 million.
The company plans to open several regional offices by the end of 2018 and is awaiting regulatory approval for a crowdfunding license, Sandwick said.
Crowdfunding enables startup firms to collect small sums of money from many individuals as an alternative to bank loans.
Albilad Capital, the investment banking unit of Bank Albilad, served as sole lead manager and arranger of the sukuk.