The Islamic Corporation for the Development of the Private Sector (ICD), a member of the Islamic Development Bank Group (IDB), and the government of Senegal and have announced the African state’s plan to relaunch a XOF 100 billion ($200 million) sukuk project next year.

This project, the first of its kind in the West African Economic and Monetary Union (WAEMU), aims to promote Islamic finance as an alternative instrument to finance the economies of the member states of the union. The announcement came during the annual meetings of the World Bank Group (WBG) and the International Monetary Fund (IMF), according to a press release received here.

FINANCING DEAL: Khaled Al-Aboodi, CEO and general manager of the Islamic Corporation for the Development of the Private Sector, left, exchanges the sukuk agreement with Amadou Ba, Senegal’s minister of economy and finance, in Washington. | Photo: Arab News

Amadou Ba, Senegal’s minister of economy and finance, has reaffirmed the interest of his government of Senegal to diversify its financing instruments by exploring the possibilities offered by Islamic finance. This project is the beginning of an ambitious program which could lead to the financing of innovative infrastructure and energy projects through sukuk issuances, he said.

He also thanked the Joint Lead Managers (JLM), the ICD and Citi, the regional regulators, the Regional Council for Public Savings and Financial Markets (CREPMF) and the Central Bank of West African States (BCEAO), as well as the West African Development Bank (BOAD) and all of the parties involved in the project formulation, for their efforts, which have resulted in an innovative structure that reconciles the prevailing regulations and the requirements of Islamic finance.

The minister reaffirmed his determination and the availability of the relevant services of the State of Senegal for the success of the project.
Khalid Al-Aboodi, CEO and general manager of the ICD, welcomed Senegal’s initiative in launching this first sukuk.

On behalf of the JLM, the ICD and Citi, he congratulated the legal counsels and the experts who participated in the project preparation as well as the regulators and the BOAD, a strategic partner in the transaction through its securitization subsidiary.

The ICD, as highlighted by its CEO, is committed to promoting and substantially increasing the volume of Islamic financing transactions for the economies of the WAEMU, in accordance with its mandate, the directives of the conference of heads of state and government of the WAEMU, and the Memorandum of Understanding signed between the BCEAO and the IDB Group.

Al-Aboodi, while welcoming the significant assistance of BCEAO, which has accepted in principle the Repo eligibility of the sukuk, said the project is the beginning of a series of regional programs which will be offered to all the WAEMU member states.

Peter M. Sullivan, managing director, head of Africa public sector who represented Citi at the ceremony, declared: “True to its longstanding commitment to providing innovative and best-in-class solutions to governments globally, Citi is delighted to support the Republic of Senegal’s financing requirements and to work with the ICD, the BOAD and the regional regulators on this ground-breaking Sukuk transaction in the WAEMU region.”

He said: “Having been associated with numerous ‘first’ transactions in the Islamic finance industry, Citi is proud to contribute to the expansion of Islamic finance to the Republic of Senegal and to the members of the WAEMU. We are convinced of the future success of this transaction for Senegal and strongly believe this will open the path for numerous additional issuers.”

ICD is a multilateral organization and a member of the Islamic Development Bank (IDB) Group established in 1999 with a paid-up capital of $2 billion.

The mandate of ICD is to support economic development and promote the development of the private sector in its member countries through providing financing facilities and/or investments which are in accordance with the principles of Sharia.

ICD also provides advice to governments and private organizations to encourage the establishment, expansion and modernization of private enterprises.

Citi has around 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi is the only international bank to have a dedicated Islamic banking subsidiary — Citi Islamic Investment Bank, incorporated in Bahrain.

*This article was published by Arab News. Read the original article here.