Islamic Development Bank commits to realign focus towards climate finance

By Gokhan Ergocun

SHARM EL SHEIKH, Egypt (AA) - Climate finance will make up 35% of the Islamic Development Bank (IsDB) Group's new operations by 2025, the lender's vice president announced on Wednesday.

Mansur Muhtar was speaking at the group's annual meeting in Egypt as it continues to realign its projects to help tackle climate change and promote green economic growth in its 57 member countries.

Stressing that the world needs to curb the current trend of greenhouse gas emissions, Muhtar said the IsDB Group is already collectively scaling up and accelerating its climate actions, supporting countries and private players.

"We're also building institutional capacities and developing innovative financial solutions," he underlined.

As a global leader in Islamic finance, the bank plans on issuing its second issuance of sukuk worth $5 billion in the next couple of years for the green transition, added the top bank official.

Sukuks are non-interest-bearing notes used in Islamic finance.

The IsDB Group is exploring the potential of micro finance to support communities and accelerate green investments in member countries, he noted, stressing that it would be essential to diversify financial instruments and support risky private-sector investments to liberate project finance and adapt it to the green transition.

He argued that the group has the opportunity to promote a framework of climate risk management and develop countries' Islamic finance institutions.

Organizing in Egypt's Red Sea resort city of Sharm el-Sheikh, the annual four-day meeting kicked off on Wednesday under the theme: "Beyond Recovery: Resilience and Sustainability."