KUALA LUMPUR – The Securities Commission Malaysia (SC) on January 21, expanded its Green SRI Sukuk Grant Scheme to encourage companies to finance green, social and sustainability projects through SRI sukuk and bonds issuance.
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 this expansion.
Moreover, the Green SRI Sukuk Grant Scheme was established in 2018 to assist issuers in defraying up to 90% of external review costs for green SRI sukuk with a size of RM6 million. Up to this point, 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.
Furthermore, already recognized as a pioneer Islamic finance and more recently for climate-friendly sukuk offerings, Malaysia made up 19% of sukuk and bonds issued under the ASEAN Standards.
As of 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 recognized under the ASEAN Standards, and another RM635 billion 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.
Besides that, 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 RM300,00p 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 five years till 2025.
To sum up, issuers are encouraged to apply 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.
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