JAKARTA (TheInsiderStories) – The government of Indonesia listed Global Sukuk with a total value of US$3 billion on the Singapore Stock Exchange (SSX) and Nasdaq Dubai on Monday (05/03). The Sukuk is divided into two series – Series A worth $1.25 billion with tenure of 5 years and Series B worth $1.75 billion with tenure of ten years.
The settlement of the global Sukuk on March 1 2018 after setting the price on Feb. 22 with yield of 3.750 per cent for five years tenure and 4.400 per cent for 10 years tenure. The bonds had obtained Baa3 rating from Moody’s Investors Service, BBB- from S&P Global Ratings, and BBB Fitch Ratings.
So far, the Indonesian government is the largest Sukuk issuer on Nasdaq Dubai by value and number of listings, with securities now totaling $14.5 billion from 10 issuances.
Indonesian Finance Ministry has issued $1.25 billion five-year green bond on Feb. 23, which is designed to comply with Sharia Law. This issuance marked Indonesia as the first Asian country to sell a sovereign green bond.
Luky Alfirman, head of the Budget Financing and Risk Management office at the Finance Ministry said the proceeds from its green bonds would be used to finance projects such as renewable energy, green tourism, and waste management.
The government has also said it will take up more projects to address climate change mitigation and adaptation, which requires alternative financing. CIMB, Citigroup, Dubai Islamic Bank PJSC, HSBC and Abu Dhabi Islamic Bank were book-runners for the deal.
The green finance market has grown rapidly in recent years, with issuance reaching a record of $155 billion in 2017, according to Moody’s Rating.
Early February, the Indonesian Stock Exchange made a bold step by joining the Climate Bonds Initiative Partner Program, the sixth stock exchange to partner with the Climate Bonds. This signals seriousness of the exchange management to develop green bond market in Indonesia.
In Asia, Chinese and Indian companies have led the way in tapping the green market to finance environmentally friendly projects but governments had until now stayed away. Worldwide, countries to have sold size-able amounts of green bonds include Poland – the first-ever – and France.