The Islamic Development Bank Group (IsDB) has many important tools to support its member countries achieve their development goals. The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), The Islamic Corporation for the Development of the Private Sector (ICD) and the International Islamic Trade Finance Corporation (ITFC) each provides critical support for the expansion of Islamic finance in member states as a constructive part of their economic activities. Each has a role in innovation through public and private sector engagement.
The 57 members of the IsDB range greatly in their wealth and economic sophistication. The ICIEC, ICD and ITFC provide vehicles to improve the conditions of the least developed member countries and improve trade between member states, and also provide financial relief when needed. In our second annual awards, the role of the IsDB is reflected in its engagement with players large and small, mega deals and model transactions, as well as government and private.
The following nominations for six categories represent encouragement to the market and member states to grow better by applying the IsDB’s resources:
ICIEC: Export Credit Agency of the Year
Most Innovative Investment Development Initiative of the Year
ICD: Most Impactful Islamic Financial Institution of the Year
Most Impactful ICD Investee Company of the Year
ITFC: Trade Finance Deal of the Year
Outstanding Contribution to Intra-OIC Trade Development
In 2024, the nominees hailed from Saudi Arabia, Turkiye, Tunisia, Uzbekistan, Kazakhstan, Bangladesh and Egypt. The shortlisted nominees represent the variety of roles that the IsDB Group plays in the encouragement of market economies in the former Soviet Union, the expansion of Islamic capital markets, critical support for healthcare in member states and growing digitalization.
We are hopeful that institutions across our membership and working with us in support of our member states will take encouragement from this year’s awards.
Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC)
The credit rating of many of our member states is sub-investment grade. This means that many global financial institutions will not deal with them even on stand-alone, short-term self-liquidating transactions. The ICIEC provides critical credit enhancement that allows a wider universe of financial institutions to support trade and investment among IsDB member states.
Export Credit Agency of the Year
The ICIEC cooperated with Kazakh Export, the Export Credit Agency of Kazakhstan, for the export of locomotives to Azerbaijan Railways by providing insurance support to the Industrial Development Fund for a US$29.8 million lease finance facility of 10 ‘Evolution – Type’ diesel locomotives to Azerbaijan Railways for 10 years.
The ICIEC extended an initial reinsurance support for US$24.2 million to Kazakh Export for the first seven years and completed the remaining cover for the outstanding amount of US$5.6 million under the Inward Facultative Reinsurance Policy for the remaining three years.
Established in 2009, Azerbaijan Railways is a state-owned rail transport operator. From the ICIEC’s perspective, the transaction meets the criteria of supporting intra-OIC trade as it involves the export of capital goods from Kazakhstan to Azerbaijan, both ICIEC member states. The transaction also meets SDG 9 of the UN, which is pertinent to industry, innovation and infrastructure.
KazakhExport was established in 2003 and is the export credit agency of Kazakhstan. KazakhExport and the ICIEC are strategic partners, and the cooperation of both institutions involves other areas such as the reinsurance of letters of credit related to exports from Kazakhstan.
Most Innovative Investment Development Initiative of the Year
The ICIEC has signed a risk-sharing engagement with African Development Bank (AfDB) which aims to support sustainable development in the Ivory Coast. The ICIEC has provided an insurance capacity of EUR194 million (US$210.13 million), backstopping the EUR400 million (US$433.25 million) partial credit guarantee (PCG) issued by the AfDB against the non-payment risk associated with a facility of EUR533 million (US$577.31 million) extended by Standard Chartered Bank to the government of the Ivory Coast.
The AfDB’s PCG mechanism is designed to cover specific risks that private creditors or investors are unwilling or unable to bear. By providing guarantees against government-related risks like breaches of contract in a project, the PCG enhances project creditworthiness, making it more attractive to private capital. It is effective because it directly addresses the risk–return concerns of private investors, facilitating the flow of private finance into critical development sectors. This collaboration leveraged a blended guarantee structure to distribute risk between the AfDB and the ICIEC. The structure was chosen to maximize the transaction’s appeal to a broad spectrum of investors by combining the strengths of a multilateral development bank and a private insurance entity. This approach significantly reduced the perceived risk and financing cost, enabling the project’s financing and supporting sustainable development in the Ivory Coast.
Islamic Corporation for the Development of the Private Sector (ICD)
The ICD has played two key roles in the expansion of Islamic finance and it takes important stakes in Islamic finance start-ups within its member states.
The ICD is also a critical promoter of the development of Islamic debt capital markets (DCMs). ICD Sukuk deals (either as an issuer or arranger for a sovereign transaction) are often seen as the first Sukuk ever issued by a country or in a country. Those who closely monitor the ICD’s DCM activities over the years will note the different currencies in which Sukuk were issued such as CFA franc, Jordanian dinar, Kazakhstani tenge and US dollar. Nonetheless, the impact is far greater when the Sukuk issuance is in the local currency. Here too, the ICD plays a crucial role.
Most Impactful Islamic Financial Institution of the Year
Kazakhstan’s JSC Leasing Group snatches this award based on its role in the first-ever tenge Sukuk. The ICD supported the development of the Kazakhstani DCM by issuing a tenge-denominated Sukuk facility last year which was rated ‘A+’ by Fitch Ratings. The Sukuk proceeds supported Leasing Group’s activities. With the volatility in currency markets representing a major risk for companies with revenues in the local currency, the ICD provided a local currency financing solution to Leasing Group. Further, the ICD’s assets and liabilities are in the same currency. In addition to that, the ICD will use the proceeds to finance its local lending in the country. It is an amortized Sukuk facility that matches the cash flow of the financing assets. The amortization will start from the end of the 12 months from the issuance date and semi-annually thereafter on an equal amount basis. The grace period of six months has been matched by the Sukuk.
Leasing Group is listed on the Kazakhstan Stock Exchange. The Sukuk proceeds are being deployed jointly by the ICD and Leasing Group for their on-lending activities (ie to finance local financial institutions and non-banking financial institutions). The ultimate beneficiaries are mostly SMEs.
The transaction won IFN’s Sukuk Deal of the Year Award for 2023. A key factor of the Sukuk issuance is to establish a replicable model throughout the IsDB’s member countries.
Most Impactful ICD Investee Company of the Year
Tunisia’s Wifak Bank made the transition from a leasing company to a fully-fledged Shariah compliant bank in 2016. Post-conversion, the ICD participated in the capital increase reserved for strategic partners including Caisse des Depots et des consignations, the Tunisian sovereign wealth fund, along with other Tunisian investors.
Eight years on, Wifak has achieved multiple milestones on various fronts. Sustainability has become a strategic focus for the bank. This follows the implementation of Wifak’s corporate social responsibility policy. In line with ISO 26000 standards, Wifak is quantifying its carbon footprint and addressing how to reduce it. The bank is also collaborating with a leading Tunisian fintech to introduce digital payments. These are the types of initiatives that have supported Wifak’s high growth over the past years.
From a developmental perspective, Wifak has made progress on SDGs 5, 8, 9, and 17. The bank provided 55,000 individuals/SMEs with access to financial resources and employed over 300 local talents. Wifak’s Fitch rating outpaces the sovereign rating.
Wifak’s shares are listed on the Tunisian stock exchange and its offerings and services are well received in the Tunisian market.
International Islamic Trade Finance Corporation (ITFC)
The ITFC is actively engaged across distinctive segments of trade finance. This includes collaboration directly with member state governments as well as the private sector. In our 2024 awards, the two most notable nominees are government agencies.
The ITFC has awarded Turk Eximbank the distinguished Trade Finance Deal of the Year award. This honor highlights Turk Eximbank’s vital role in expanding the ITFC’s private sector initiatives and their successful, long-standing partnership. Since their collaboration began in 2009, the ITFC has approved approximately US$3.5 billion in financing for Turk Eximbank — an impressive US$3.2 billion of which has been mobilized from external sources.
This support significantly impacts Turkiye’s trade landscape, representing 66% of the ITFC’s cumulative approval for the country. Importantly, the financing prioritizes SMEs and the textile sector, fostering job creation and socioeconomic development in Turkiye while strengthening trade ties within the OIC.
Recently, the ITFC approved a new US$200 million syndicated Murabahah financing facility for Turk Eximbank. Due to overwhelming interest, the facility was oversubscribed, leading to a US$277 million disbursement in September 2023 — a testament to the strength of this partnership. This award recognizes Turk Eximbank’s excellence as the Turkish government’s export incentive instrument, promoting international trade.
Outstanding Contribution to Intra-OIC Trade Development
The ITFC has awarded the Foreign Trade Training Centre (FTTC) the distinguished Outstanding Contribution to Intra-OIC Trade Development award. The FTTC was born from the Egyptian government’s ambition to boost the country’s position in the global market. Established by the Ministry of Trade & Industry, the FTTC works with trade facilitators, established exporters and fresh graduates — molding them into export experts who can navigate the complexities of the global marketplace, with a special focus on strengthening trade relationships within the OIC.
Conclusion
The IsDB Group looks forward to the inspiration and encouragement that these awards provide to governments and institutions throughout our membership. Each of these engagements represents the role of collaboration in two critical areas: Meeting the UN SDGs and promoting the effective use of Islamic finance. The IsDB is committed to supporting its member states and stakeholders in their aspirations to achieve a better future.