The United Nations Development Programme (UNDP), Securities Commission Malaysia (SC) and the Islamic Development Bank (IsDB) have partnered to advance the use of Islamic financing tools to fund the ambitious 2030 Agenda for Sustainable Development.
The scale of funding and technical support required to meet the Sustainable Development Goals (SDGs) are far beyond the scope of individual governments and multilateral agencies, hence it will be important to bring in the private sector and new partners who will be crucial in filling the significant funding gap.
Prime Minister Dr. Mahathir Mohamad presented Malaysia’s global leadership in Islamic finance and in advocating for the convergence of Islamic instruments and green financing at the high level side event- ‘Achieving the SDGs: Unleashing the Potential of Islamic Finance through Innovative Investors and Instruments,’ organised today at the United Nations coinciding with the 73rd UN General Assembly.
“Looking at the wealth possessed by many Islamic countries it was necessary to invent ways to finance money. We believe if money is invested and the return is not a fixed income, we will not be breaching the Islamic Law,” he stated. “The value of money should not be lost because of not being invested”.
Malaysia’s capital market regulator paved way for the issuance of the world’s first Green Sukuk in 2017. Since then, Malaysia has issued a total of six Green Sukuk with several others in the pipeline.
Islamic finance is significantly aligned with values of responsible investing and is receiving wide acceptance as a vital funding solution to financing sustainable development projects. Green Sukuk, in particular, has emerged as an innovative financing vehicle for projects aimed to protect the environment and combat climate change, such as the renewable energy and green infrastructure projects.
UNDP launched the Global Islamic Finance and Impact Investing Platform (GIFIIP) with the Islamic Development Bank in 2016 to provide market-based solutions to sustainable development challenges, aiming to position Islamic finance impact investing as an enabler of SDG implementation.
Given the tremendous potential of Green Sukuk, the Securities Commission Malaysia, Islamic Research and Training Institute (IRTI) of IsDB and UNDP have committed to further collaboration under the GIFIIP initiative to promote and implement Green Sukuk across the globe. This collaboration will focus on increasing awareness and building the capacity of energy and investment companies, as well as governments, harnessing the potential in the renewable energy industry.
“UNDP strongly believes that this partnership will yield in exciting results with increased engagement of Islamic financiers in development. We look forward to cooperating with partners across the public and private sector to unleash innovative Islamic finance opportunities and governments towards the realization of the Global Goals,” stated Mr. Tegegnework Gettu, the UN Under-Secretary-General and UNDP Associate Administrator.
“Our partnership with UNDP has resulted in several initiatives and expanded opportunities through Islamic Funds. We hope that Islamic Finance is used as one of the strong tools to achieve the SDGs and to end human miseries,” said Dr. Mohamed Jouni, Vice President, Partnerships of the Islamic Development Bank.
With presence in over 170 countries and over 50 years of experience, UNDP is also supporting Islamic Finance organizations to align with the SDGs, implementing projects through Islamic micro-finance, channelling Zakat towards development projects, helping governments to develop pipelines for green sukuk and promoting the productive management of waqf through digital platforms.—Agencies