Islamic Development Bank Plans to Enter Saudi Housing Sector

housing

Jeddah – The Islamic Development Bank (IDB) plans to enter the Saudi housing sector through investments that are being prepared by technical teams in cooperation with the Saudi Housing Ministry.

The bank also inked an agreement with the Saudi Education Ministry tasking the bank to find solutions for the unemployment crisis driven by the discrepancy between education programs and labor markets demands.

The Islamic Development Bank stressed the importance of focusing on comprehensive solutions set in its new policy, which will adopt a network that links many countries in order to exchange expertise and skills among its 57 member states.

IDB official spokesperson Dr. Abdulhakim Elwaer revealed to Asharq Al-Awsat a new partnership with Saudi Arabia in different sectors, including housing, education, labor and human resources.

Elwaer noted that the IDB President Ahmed Mohamad Ali made important steps in this matter in January and found positive feedback among different Saudi ministries and governmental entities, which will cooperate in the partnership.

He added that the president, accompanied by 20 experts, met officials in many ministries and entities in Riyadh earlier this year. Those agencies included the ministries of housing, education and agriculture, the King Abdullah Economic City and many other institutions. Discussions focused on determining the ministries’ top priorities in which they will partner with the bank.

Elwaer revealed that the Islamic Development Bank will soon unveil the details of the new strategic partnership with Saudi Arabia.

The bank inked an agreement with the Education Ministry to help it in empowering graduates in finding jobs.

The ministry of education confirmed that Dr. Ahmad al-Issa and Dr. Bandar bin Mohammad Hajjar signed a Memorandum of Understanding (MoU) that includes a program to develop youth capacities.

Commenting on the MoU, Hajjar stressed the IDB’s commitment to find innovative solutions to counter unemployment by providing programs of literacy and support to youths, noting that addressing unemployment requires the cultivation of the needed skills among the young generation.

IDB Concludes Cooperation Agreements with Yemen, Tunisia

Tunisia's Investment Minister Fadhel Abdelkefi speaks with Reuters journalists in Tunis, Tunisia,

Jeddah-The 42nd annual meeting of the Islamic Development Bank (IDB) that was held on Wednesday in Jeddah has witnessed the signing of agreements with public institutions in Yemen and Tunisia.

The IDB confirmed during the meeting its participation in reconstructing troubled member states after they gain their stability.

The bank also revealed it will allocate $1.5billion to invest in the agricultural sector in Islamic countries.

Minister of Development, Investment and International Cooperation Fadhel Abdelkafi, acting Minister of Finance in Tunisia, told Asharq Al-Awsat that his ministry has concluded an agreement with the IDB in the fields of electricity, petroleum and trade finance.

Abdelkafi confirmed that the bank has been using all its potential for decades to reduce unemployment, especially for holders of higher degrees, and address poverty in member countries.

He said that the bank’s new approach in supporting development is the main goal of all the governments that was announced in early 2017 and will further contribute to the Bank’s development objectives.

In a press conference that was made on the sidelines of the fourth day of the 42nd annual meeting, Abdelkafi said that Saudi and Gulf investments that have been implemented in Tunisia since 1975 have contributed to establishing huge projects, pointing out the role of financial bodies in the gulf in supporting Tunisia in this field and to the special relation between his country and the Arab countries.

On the other hand, the Tunisian Minister referred to the new Tunisian investment law and the facilities offered to investors, explaining that the new law has come into effect in April 2017 and aims at promoting investment, competitiveness, export and technological content of the national economy and the development of priority sectors in Tunisia.

Regarding the issues that will be tackled in the next meeting of the Bank Group, Abdelkafi said that Tunisia’s approach always focuses on education, women, health and youth empowerment.

He stressed Tunisia’s support for the new approach of the Islamic Development Bank to achieve integrated and sustainable development.

IDB Implements Development Projects in Yemen Worth $364 Mln

Yemen

Jeddah – Saudi Ambassador to Yemen Mohammed Al Jaber said that the Islamic Development Bank (IDB) – which headquarter is in Jeddah, has implemented 31 development projects in Yemen worth $364.8 million (SR1.368 billion) in all Yemeni governorates.

During his visit Thursday to the Bank and after meeting Manager of the Country Programs Department Ahmed Hariri, Al Jaber said that Saudi Arabia is considered the biggest funder for the IDB, which is implementing large projects in a number of Islamic countries, including Yemen.

The Saudi Ambassador pointed out that among the plans implemented by the Bank in Yemen are roads, water, sanitation, electricity, as well as agricultural and health projects.

He also said that the cost of projects specialized in supporting youth in Yemen has amounted to SR187 million, and the IDB has also provided mobile clinics in the provinces of Yemen at a cost of SR185 million.

IsDB Draws Roadmap to Enlist the Poor in Production

A man walks past an Emirates Islamic Bank branch in Bank street in Dubai, October 18, 2011. Two years after the Dubai debt crisis erupted, contributing to a wave of loan restructurings across the Gulf, those restructurings may be entering a more difficult phase as banks become reluctant to extend maturities further. Picture taken October 18, 2011. To match Analysis GULF-DEBT/RESTRUCTURING REUTERS/Jumana El Heloueh (UNITED ARAB EMIRATES - Tags: BUSINESS) - RTR2SURT

London – Islamic Development Bank (IsDB) President Bandar Hajjar has launched a roadmap to resolve social and economic problems that are facing the world. “Confronting poverty is not restricted to providing food, clothes and housing but transforming the poor to a productive individual,” Hajjar told Asharq Al-Awsat.

The newspapers asked, “You became an official president of IsDB last October and 100 days later you spoke about a roadmap for the coming five years. What is this plan?”

Hajjar replied that, “After considering the internal and foreign challenges as well as the economic, political and social difficulties I put a roadmap based on this given and it clarifies how the bank will operate within these five years to be capable of dealing efficiently with these challenges.”

“Are there specific fields that top the list of priorities in your five-year plan?” asked Asharq Al-Awsat.

“There are three strategic goals: joint comprehensiveness through fulfilling needs of the poor and marginalized, correlation to achieve sustainable growth via reinforcing joint investment and expertise exchange and the third goal is supporting Islamic banking industry,” replied Hajjar.

When asked about the bank announcing that it will become a decentralized bank, IsDB president said that the decentralization means transferring some operations from the bank’s main headquarters in Jeddah to regional offices. He continued that the distribution of offices on regions serves the purpose of activating their role and permitting them to perform their tasks efficiently.

“The regional office is located in a certain country but several neighboring countries benefit from it,” added Hajjar.

“Some see that the IsDB needs to exert extra efforts to develop the Islamic banking industry – economic updates are racing while finding solutions that comply with the sharia is being a slow process,” said the newspaper.

Hajjar commented that “Innovating more long-term financial tools and reducing short-term funding as well as expanding bonds-funding and developing the institutions of Zakah, Wakaf, Qard Hasan and others are all a must.”

The newspaper asked, “In the past weeks, you received delegations from Russia and discussed cooperation in the field of Islamic banking. What is the role of IsDB in this segment?”

IsDB president replied that “There is a huge interest in Islamic banking in Russia. In May 2016, IsDB signed a MoU with the Central Bank of Russia and other Russian banks. These memorandums allow t

he exchange of expertise and knowledge in the aim of developing the segment of Islamic baking and underpinning cooperation opportunities in diverse areas of work.”

“What about the partnership forum between the public and private sectors that you are willing to establish in Riyadh? Why did you highlight the private sector?” asked the newspaper.

Hajjar answer came as follows, “A glance on the necessary investment in infrastructure, worldwide, shows that it is estimated as USD3.3 trillion annually. These essential needs and projects require huge investment and various experiences that’s why it is a keypoint that the private and public sector join efforts to implement them. The world countries are working on developing partnership forms to make thereof more efficient. Why now? Because distributing risks on several parties and providing the capital, knowledge and experience alleviates financial burdens on the public sector.”

Iraq Gets Initial Approval for Islamic Development Bank Loans

The Islamic Development Bank has given its initial agreement to provide $3 billion in easy loans and grants to cash-strapped Iraq after a similar measure was announced by the International Monetary Fund this month.

The Islamic bank’s loan is aimed at helping Iraq cope with a sharp decline in oil revenue, a central bank spokesman in Baghdad said Thursday in an email.

The spokesman did not give further details.

Iraq earlier this month agreed a $5.4 billion standby loan with the IMF.

Finance Minister Hoshyar Zebari announced the agreement on May 19, saying the IMF loans could unlock $15 billion more in international assistance over the next three years.

Iraq’s oil-reliant economy has been hit by plummeting oil prices since mid-2014 and the country is expected to have a financing gap of $17 billion this year unless it can secure more funding, an IMF document obtained by Reuters showed.

Large-scale land grabs by ISIS since 2014 exacerbated economic decline, forcing the Iraqi government to divert large sums to fighting the militants.

In 2016, Iraq has a budget of close to $90 billion, with a deficit of about $20.5 billion. The government hopes to narrow the spending gap with loans from local and international lenders.

Last year, Iraq secured $1.7 billion in loans from the World Bank and $833 million from the IMF.

Global Initiative to Reconstruct Middle East, Solve Refugee Crisis- World Bank

Director of Regional Programs, Partnerships and Integrated Solutions, Middle East and North Africa, Franck Bousquet

London- Leaders of the World Bank, United Nations, and Islamic Development Bank Group pledged to work closely together in the region. They recently launched the new financing initiative to support the MENA region aimed at uniting the international community to face the region’s immense challenges, including flow of refugees, and to launch of the process of growth, recovery and reconstruction.

With the Syrian conflict entering its sixth year, and the region coping with one of the largest refugee crises since World War II, this approach aims at completing the massive humanitarian effort through strengthening the capacities of individuals and local communities to confront the traumas of conflicts and unrests and laying the necessary foundations to promote peace and stability.

This plan needs forming broad alliances as the objectives of the new strategy and the resources necessary to achieve them exceeds the capacity of any single organization.

In an interview with Asharq Al-Awsat, Director of Regional Programs, Partnerships and Integrated Solutions, Middle East and North Africa, Franck Bousquet, revealed that an expanded meeting will be held under the chairmanship of World Bank Group President Jim Yong Kim, United Nations Secretary-General Ban Ki-moon and President of the Islamic Development Bank Group Dr Ahmed Mohammed Ali Al-Madani with ministers from Group of Seven, Gulf Cooperation Council and European countries, in addition to presidents of various international and regional organizations, on the 15th of April.

The meeting will be held on the sidelines of the spring meetings of the International Monetary Fund and the World Bank in Washington that aim at discussing World Bank’s new financing initiative to support the MENA region.

Bousquet said that this chance promises providing primary financial support to launch the initiative and take appropriate and decisive actions in order to restore hope to millions of people across the region.

Bousquet said that World Bank Group President Jim Yong Kim announced in February, during Syria Conference that was held in London, that the initiative aimed to raise $1 billion dollars of grants from donors. These grants will leverage between $3 and $4 billion dollars of concessional finance for Lebanon and Jordan. These new financing initiatives, combined with the Bank’s existing programs, are expected to total about $20 billion dollars in the next five years, Kim said.

When asked about the price needed to reconstruct Syria, Bousquet answered that the bank estimates it will cost 170 billion US dollars over 10 years to rebuild Syria.

He also told Asharq Al-Awsat that the conference, which will be held in spring, will provide a chance to continue the new financing initiative to support the MENA region. This initiative was announced last October by the Secretary- General of the United Nations, the Presidents of the World Bank Group and the Islamic Development Bank Group during the annual meeting in Lima.

The meeting aims to help countries hosting significant refugee populations, countries impacted by conflict, as well as countries that have significant investment needs to achieve economic recovery.

“During the past few months, a working group headed by UN, World Bank and Islamic Development Bank finalized the details of the financing mechanisms and developed an implementation roadmap,” he said.

Moreover, Bousquet explained that the initiative aims at narrowing the gap between humanitarian and development needs to strengthen coordination between development banks, the United Nations, donor countries and hosting countries from the Middle East and North Africa. It also aims at coordinating the supporting procedures in order to tackle unusual challenges these countries are facing.

The international community is also working on supporting countries impacted by conflict and economic slowdown, as well as those affected by large numbers of refugees and internally displaced persons.

Islamic Development Bank scores high on credit ratings

The Riyadh skyline. Asharq Al-Awsat file photo.
The Riyadh skyline. Asharq Al-Awsat file photo.
File photo of the Riyadh skyline. (Asharq Al-Awsat file photo)

London, Asharq Al-Awsat—International ratings agencies Standard & Poor’s (S&P), Fitch Ratings and Moody’s have all awarded Jeddah-based Islamic Development Bank (IDB) their highest long-term and short-term credit rating scores, making the bank the most highly-rated institution among regional and international multilateral development banks, and the Muslim world’s most highly-rated institution, according to an IDB press release.

S&P and Fitch gave the bank an AAA long-term rating, with Moody’s awarding it an Aaa long-term rating, representing the highest scores for all three institutions, denoting “stability,” “reliability” and “low credit risk.”

In terms of short-term ratings indicating the potential likelihood of an institution defaulting on its debt obligations within a 12-month period, IDB also scored positively, gaining A1+, F1+ and P-I ratings from S&P, Fitch and Moody’s, respectively, indicating the bank’s “strong” and “superior” ability to meet debt obligations short-term.

All three institutions reaffirmed their outlook for IDB as stable.

Last month Moody’s published a report predicting positive growth trends for the global sukuk market, pointing to growing investor comfort with Shari’a-compliant investment instruments like sukuk, alongside more conventional methods of finance. The report predicted “slightly more” than 51 million US dollars’ worth of sukuk would be issued by year’s end, beating levels recorded in 2011.

In May, IDB priced a 1 billion US dollar five-year sukuk sale.

Islamic Development Bank sets guidance for $1 bn sukuk

File photo of the National Bank of Abu Dhabi headquarters, one of the banks arranging the sukuk bonds. (REUTERS)
File photo of the National Bank of Abu Dhabi headquarters, one of the banks arranging the sukuk bonds. (Reuters)
Dubai, Reuters—The Islamic Development Bank, a Jeddah-based multilateral institution, set price guidance for a USD 1 billion Islamic bond sale on Tuesday, a statement from the lead banks arranging the issue showed.

The AAA-rated bank, whose largest shareholder is Saudi Arabia, is offering a price guidance of midswaps plus high 30 basis points for the five-year sukuk, the document said.

IDB was scheduled to meet with investors in the Middle East, Asia and Europe beginning May 25. The deal is expected to price on Wednesday.

Banks arranging the sukuk are Qatar’s Barwa Bank, Credit Agricole, CIMB, National Bank of Abu Dhabi , Natixis, NCB Capital—the investment banking arm of Saudi’s National Commercial Bank, Royal Bank of Scotland and Standard Chartered.

Last week, the bank which provides financing and loans in Muslim countries, more than tripled its authorized capital to USD 150 billion to better support development projects in its 56 member nations.