null SRI sukuk and bond grant scheme to encourage capital market fund raising for sustainable development
SRI sukuk and bond grant scheme to encourage capital market fund raising for sustainable development
21 Jan 2021 | Thursday source: The Securities Commission Malaysia
The Securities Commission Malaysia (SC) today expanded its Green SRI Sukuk Grant Scheme to encourage more companies to finance green, social and sustainability projects through SRI sukuk and bonds issuance.
With this expansion, the grant is now renamed as SRI Sukuk and Bond Grant Scheme and applicable to all sukuk issued under the SC’s Sustainable and Responsible Investment (SRI) Sukuk Framework or bonds issued under the ASEAN Green, Social and Sustainability Bond Standards (ASEAN Standards).
With a size of RM6 million, the Green SRI Sukuk Grant Scheme was established in 2018 to assist issuers in defraying up to 90% of the external review costs for green SRI sukuk. Thus far, it has benefitted eight issuers involved in renewable energy, green building and sustainable projects.
“As a regional leader in sustainable and responsible investment, Malaysia’s capital market offers companies efficient and reliable access to financing of sustainable projects that can positively contribute to the environment and society, in alignment with the country’s commitment to the Sustainable Development Goals and the climate change agenda,” said Datuk Syed Zaid Albar SC Chairman.
Already recognised as a pioneer in Islamic finance and more recently for climate-friendly sukuk offerings, Malaysia made up 19% of sukuk and bonds issued under the ASEAN Standards. As at December 2020, RM5.4 billion SRI sukuk have been issued under the SRI Sukuk Framework, out of which 58% or RM3.1 billion are also recognised under the ASEAN Standards, and another RM635 million bonds issued under the ASEAN Standards. This signifies the demand for an asset class that meets the criteria for Shariah as well as sustainable and responsible investing.
The SRI Sukuk and Bond Grant Scheme is now opened for application where eligible issuers can claim the grant to offset up to 90% of the external review costs incurred, subject to a maximum of RM300,000 per issuance. The SRI Sukuk and Bond Grant Scheme is administered by Capital Markets Malaysia, an affiliate of the SC.
As announced in Budget 2021, income tax exemptions are provided for the recipients of the SRI Sukuk and Bond Grant Scheme for a period of five years until 2025.
Issuers are encouraged to submit application for the SRI Sukuk and Bond Grant Scheme, aimed at lowering the cost of issuances and encouraging continuous issuances of SRI sukuk and bonds in advancing Malaysia as a regional sustainable finance hub.
For more information on the SRI Sukuk and Bond Grant Scheme, please visit www.sc.com.my/development/sri.