SRI Sukuk And Bond Grant Scheme to Encourage Capital Market Fund Raising for Sustainable Development
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 https://www.sc.com.my/development/sri.
Source: Securities Commission Malaysia
The information provided in this report is of a general nature and has been prepared for information purposes only. It is not intended to constitute research or as advice for any investor. The information in this report is not and should not be construed or considered as an offer, recommendation or solicitation for investments. Investors are advised to make their own independent evaluation of the information contained in this report, consider their own individual investment objectives, financial situation and particular needs and should seek appropriate personalised financial advice from a qualified professional to suit individual circumstances and risk profile.
The information contained in this report is prepared from data believed to be correct and reliable at the time of issuance of this report. While every effort is made to ensure the information is up-to-date and correct, Bond and Sukuk Information Platform Sdn Bhd (“the Company”) does not make any guarantee, representation or warranty, express or implied, as to the adequacy, accuracy, completeness, reliability or fairness of any such information contained in this report and accordingly, neither the Company nor any of its affiliates nor its related persons shall not be liable in any manner whatsoever for any consequences (including but not limited to any direct, indirect or consequential losses, loss of profits and damages) of any reliance thereon or usage thereof.