World Bank to fund $500m 'green' highways project in India
More UAE and Gulf based funds and investors are going all out for sustainability-themed projects. The $900 million green sukuk represents the first by a Bahraini entity, with Infracorp being the issuer. Image Credit: Shutterstock

Dubai: Bahrain’s Gulf Finance House expects a net positive on its financials from the listing of a $900 million sukuk on London Stock Exchange. What is special about this debt offering is this is the first ‘green sukuk’ issued by a Bahraini entity.

The issuer, Infracorp, will use these funds to speed up growth of sustainable infrastructure development across the Middle East and in South Asia too.

Infracorp is the infrastructure and sustainability arm of GFH Financial Group. The move to come out with a green sukuk – essentially debt issues supporting sustainability ventures – “builds on the Group’s accumulated experience of supporting the sustainable development of the communities and economies where it operates”.

“With green sukuks growing by more than 17 per cent year-on-year in 2021 to $15 billion and expected to remain a key theme of the Islamic finance market in 2022, sukuk issuance activity is expected to stand between $160 billion and $170 billion in 2022,” said Hisham Alrayes, Chairman of Infracorp. “We anticipate a growing investor appetite for ESG (Environmental, Social, Governance) and for green sukuks throughout the ongoing economic headwinds.”

A $3b portfolio

Infracorp manages assets of nearly $3 billion of infrastructure assets, including a 250 million square feet land bank marked for sustainable economic and social infrastructure. The group is building a sustainability programme, in part through investments in a social infrastructure portfolio covering building materials, logistics and technologies that support climate change goals, as well as social infrastructure assets across the education and healthcare sectors.

This ($900 million) sukuk is a response to the market’s appetite for opportunities that generate returns also in addition to participating in leaving a significant and tangible ESG impact

- Hisham Alrayes, Chairman of Infracorp