RIYADH, (Reuters) – The Islamic Development Bank (IDB) will more than double the size of bonds, or sukuk, issued under an ongoing programme to $3.5 billion to help meet financing needs mainly from flood-ravaged Pakistan.
“(IDB) has successfully updated its Sukuk Trust Certificate Issuance programme and increased the ceiling of the program from $1.5 billion to $3.5 billion,” it said in a statement on Sunday.
“This increase is to facilitate new issuance of sukuk which will be used to finance a planned growth in IDB’s operations,” it added.
It did not say when it plans to sell its next sukuk.
In 2009, the Saudi-based triple-A lender issued an $850 million sukuk which was the first tranche of a $1.5 billion bond. The issue was part of the $6 billion programme it established to soften the impact of the financial crisis on its member countries.
An IDB official said the move would enable the bank to provide loans to Pakistan, hit by massive flooding earlier this year. The World Bank estimates the floods have damaged or destroyed more than 1.8 million homes and displaced over 8 million people.
“Rebuilding Pakistan is a main priority for us now,” the official told Reuters. He asked not to be named because he is not allowed to discuss IDB’s plans at this stage.
“That’s one of the reasons why we are proceeding with this increase in our sukuk issuance plan, which will also boost our aid to other Muslim countries.”