Annual Report
2022

Raising the production capacity of one of Bangladesh’s largest industrial conglomerates

In 2022, ICD extended a EUR 22.50 million facility using an Ijarah structure to Abul Khair Strips Processing Limited (AKSPL), a subsidiary of Abul Khair Group in Bangladesh. Abul Khair Group is one of the largest conglomerates in Bangladesh, having a strong foothold in the steel, cement, ceramics and fast-moving consumer goods (FMCG) market segments. The Group is currently the market leader in steel and cement products in Bangladesh. AKSPL, the beneficiary of ICD financing, produces intermediate products required for roofing and fencing in rural and industrial areas. ICD’s financing enabled AKSPL to expand its capacity from 305,000 metric tons (MT) to 505,000 MT and add new products to its portfolio by procuring equipment from Italy’s Danieli, one of the most renowned steel equipment manufacturers in the world. The project has had a very strong development impact in terms of employment creation, technology transfer and improving local capacities. The total number of jobs generated from this new project is estimated to be 800.

The company is now the largest steel billet production plant in Bangladesh. The ICD facility has been repaid in full and the plant is now fully operational and is planning to expand its capacities.

Supporting Uzbekistan’s energy transition and enhancing its power supply

Stone City Energy B.V. (the “Investor” or the “Founding Sponsor”) was established in 2019 to help Uzbekistan increase energy efficiency and electrical output as well as to strengthen the country’s energy security. This is expected to be achieved by the development of a 1,560 MW Combined Cycle Gas Turbine (CCGT) power plant (the “Project”) to be located in the Surkhandarya region of Uzbekistan.

The CCGT power plant project cost is estimated at EUR 1.30 billion which will be funded on an 80:20 senior debt to contributed equity ratio. The senior debt financiers are (i) lenders covered with export credit agencies and (ii) development finance institutions (DFI). To date, ICD and IsDB have confirmed their participation. Societé Generale (Soc Gen) and KfW-Ipex will benefit from Euler Hermes and Credendo, the German and Belgian export credit agencies, respectively. ICD’s participation will be structured as a procurement (Istisna’a) plus forward lease (Ijarah) facility.

Given the country’s strong GDP growth trajectory as well as its aging fleet of thermal power plants, investment in modern CCGT projects is one of Uzbekistan’s key strategies. The replacement of existing old gas fired power plants with new and efficient CCGT plants during the first half of this decade will be a significant step and is in line with Uzbekistan’s goal of achieving a carbon-neutral electricity sector by 2050. In addition to its main objective of power production, the project will also fulfil a strategic role for the stability of Uzbekistan’s power grid.

Helping SMEs scale up in challenging economic environments

Small and medium-sized enterprises (SMEs) and entrepreneurs are fundamental to economic growth, competitiveness, and job creation. By nature innovative and opportunity-seeking, their viability will be critical to any post-crisis recovery. To this end, SMEs must be supported with a sharpened focus on building sustainability and resilience to enable them to make a greater contribution to a post-pandemic economic revival.

A lack of appropriate forms of finance has long been a hurdle for SMEs and prevented them from reaching their full potential, with varying degrees of severity of financing constraints across member countries. Informal SMEs in particular may be unserved or underserved by financial institutions. Capital gaps also exist for innovative and growth-oriented firms, as well as for medium-sized enterprises that seek to invest and expand, and for SMEs seeking to undertake green investments.

In 2022, ICD continued to focus on extending lines of finance to partner financial institutions in its regions of operations in order to support SMEs.

Providing onward home financing to consumers

In line with the National Transformational Plan (Vision 2030), the Saudi government aims to double the contribution of real estate to the country’s GDP to 10% and increase home ownership by Saudi nationals to 70% by 2030. To achieve this, various measures have been initiated, such as incentivizing developers and building affordable housing projects. The Saudi government’s focus on the real estate sector, as part of the diversification process of the economy, is anticipated to boost the residential market over the coming years. Consequently, ICD extended USD 30.00 million Commodity Murabaha to Bidaya Home Finance (BHF) for the financing of its home mortgage portfolio and the refinancing of its existing debt. The developmental impact of the project is significant and includes i) assisting Saudi Arabia in addressing its growing demand for housing, and b) provide financing for BHF to enhance its portfolio and encourage home ownership in Saudi Arabia. The project will contribute to at least four Sustainable Development Goals (SDGs): SDG8 (Decent Work and Economic Growth), SDG9 (Industry, Innovation, and Infrastructure), SDG11 (Sustainable Cities and Communities), and SDG17 (Partnership for the Goals).

Other highlights of 2022

ICD maintains strong credit rating and stable outlook, according to Moody’s and Fitch

Moody’s Investors Service has recently affirmed the Islamic Corporation for the Development of the Private Sector (ICD) A2 issuer rating with a stable outlook, citing balanced risks to the credit profile and a strong liquidity position compared to similarly rated peers. Fitch Ratings also reaffirmed ICD’s Long-Term IDR at ‘A+’, indicating a strong creditworthiness. These affirmations reflect the financial stability and creditworthiness of ICD.

ICD’s ‘BRAVE Women Yemen 2.0’ Initiative approved by We-Fi Secretariat

The Women Entrepreneurs Finance Initiative (We-Fi) Secretariat has approved the “BRAVE Women Yemen 2.0 Blended Finance” project proposal, prepared by ICD with a funding request of USD 5.5 million. This new initiative, the first of its kind in Yemen, will introduce new components to the existing BRAVE Women program and support a greater number of women entrepreneurs in the country. The BRAVE Women program, which is already running in Yemen, Nigeria, and Burkina Faso, aims to enhance the resilience of women-owned or led SMEs (WSMEs) in fragile contexts and works to increase their business growth opportunities through capacity building and funding.

ICD and Refinitiv launch report on Islamic finance and evolving landscape of technology and society

ICD and financial data and infrastructure provider Refinitiv have jointly launched a report on the intersection of technology and society and the potential for Islamic finance to address the challenges presented by these trends. The report, which highlights the interrelatedness between technology and society, identifies opportunities and solutions anchored in Islamic finance that have the most potential to address the challenges we may face. It also discusses the potential of Islamic finance to lead market metamorphosis in response to these trends.

ICD and Refinitiv release the Islamic Finance Development Indicator (IFDI) 2022 report on the state of the global Islamic finance industry

ICD, in collaboration with Refinitiv, released the IFDI 2022 report presenting the overall development of the Islamic finance sector. The report is a guide on the state of the global Islamic finance industry and measures countries across knowledge, governance, corporate social responsibility, and awareness metrics.

ICD releases the first edition of the Fintech Market Entry Report series

In 2022 ICD published the first edition of its Fintech Market Entry Report series, focusing on Albania, Azerbaijan, Bosnia and Herzegovina, and Türkiye. The report is available on ICD’s website and aims to provide insights into the development and growth potential of the FinTech industry in these countries. The series is intended to be a resource for those looking to enter or expand in the FinTech market in member countries.