ICDNewsletter Issue 04 Quarter 3/4-1434H

ICDNewsletter Issue 04 Quarter 3/4-1434H

THE ISLAMIC CORPORATION FOR THE DEVELOPMENT OF THE PRIVATE SECTOR (ICD) editorial BACKGROUND The Islamic Corporation for the Development of the Private Sector (ICD) is a multilateral developmental organization affiliated with the Islamic Development Bank (IDB) Group. Its authorized capital stands at $2 billion. Its shareholders consist of the IDB, 52 member countries, and five public financial institutions. Headquartered in Jeddah, KSA, the ICD was established by the IDB Board of Governors during its 24th annual meeting held in Jeddah in November 1999. The mandate of the ICD is to support the economic development of its member countries through provision of finance to private sector projects in accordance with the principles of Sharia a law i.e. Islamic Law. FUNCTIONS The ICD finances projects that are specifically geared to creating employment opportunities and boosting exports. Furthermore the ICD mobilizes additional resources for projects and encourages the development of Islamic financing and capital markets. It also attracts co-financiers for its projects and provides advice to governments and private sector groups on policies aimed at encouraging the establishment, expansion and modernization of private enterprises, development of capital markets, best management practices and enhancing the role of the market economy. ICD MEMBER COUnTRIES Albania Egypt Algeria Gabon Libya Malaysia Senegal Sierra Leone ICD believes that being economically successful and internationally competitive generates value for its member countries at large. Despite the challenging environment, ICD has move towards a momentum of growth and reported a consistent performance in the second semester of 1434H. It reflected a steady growth of its projects, widening reach through multiple channels, including a healthy growth of businesses and revenues. Azerbaijan Bahrain Bangladesh Benin Gambia Guinea Guinea Bissau Indonesia Maldives Mali Mauritania Morocco Sudan Suriname Syria Tajikistan In spite of the global economy turmoil, ICD continued to demonstrate its remarkable underlying strength ad resilience to organize business forums and conferences. The financial results indicated during the second semester are strong and robust. Brunei Iran Mozambique Tunisia Additionally, the ICD accompanied such business accomplishments with an adequate development of its Burkina Faso Iraq Niger Turkey support functions, agreements and Memorandums of Understanding (MOUs) with member countries Cameroon Jordan Nigeria Turkmenistan institutions. Chad Comoros Côte d Ivoire Kazakhstan Kuwait Kyrgyzstan Pakistan Palestine Qatar UAE Uganda Uzbekistan On the back of such performances, ICD looks at the future with faith and optimism. The Corporation believes there are many opportunities at the horizon and that it is very well placed to grasp them. Djibouti Lebanon Saudi Arabia Yemen Khalid Mohammed Al Aboodi CEO, Islamic Corporation for the Development of the Private Sector (ICD) 02 03

MEETINGS, Agreements and Memorandum of Understanding Chad s Islamic finance moves get ICD involvement ICD extends $6 million line of finance facility to Orienbank ICD, Thomson Reuters to develop Islamic finance industry On the sidelines of the 38th Annual Meetings of the Islamic Development Bank Group, the ICD and the Ministry of Finance and Budget of the Republic of Chad have signed a partnership agreement aiming at the creation of a local leasing company (ijara) and a local Islamic bank compliant to the principles of Islamic finance. Through this agreement, ICD will have its first footprint in the financial institution industry in Chad and will then contribute to promote the development of Islamic finance and support the small and medium enterprises (SMEs). ICD goes into a strategic alliance with Zaman Bank of Kazakhstan The ICD announced its footsteps in the Islamic banking sector of the Republic of Kazakhstan with a mandate of converting a regional and leading regional Bank into an Islamic bank with expected investment of up to 35% of the subscribed and paid up capital of the bank. Accordingly, it will become second Islamic bank in the country. This strategic initiative reflects ICD s continuous effort to play a catalyst role in the promotion of Islamic finance and private sector development in Kazakhstan. The ICD and Tajikistan s Orienbank signed a deal that saw The ICD and Thomson Reuters, the world s major provider ICD extending to the Tajik bank $6 million Line of Financing of intelligent information for businesses and professionals, facility during the 38th IDB Group meeting in Tajikistan. announced the joint development of the Islamic Finance The $6 million Line of financing facility will then be lent Development Indicator a single, composite numerical by Orienbank to the SMEs sector to projects in industrial, measure representing the overall health and growth of the communication, technology, health, construction and agricultural sectors. the IDB annual Islamic finance industry worldwide on the sidelines of meetings. ICD to set up specialized bank in Bangladesh ICD announced that the Corporation desires to engage Bangladesh more by helping to create a specialized bank with international presence through which funds can be mobilized from Bangladeshi expatriates and the Middle East investors to upgrade the country s infrastructure and more support can be provided to the private sector. ICD intends to further enhance its support to the SMEs development in Bangladesh in addition to US$50 million, which has already approved. 04 05

MEETINGS, Agreements and Memorandum of Understanding ICD backs $200 million Senegal Sukuk project ICD extends $10 million to Asaka bank in Uzbekistan Partnership deal between ICD and Asia Alliance Bank OJSC ICD signs new deal to support small enterprises The ICD and the Asia Alliance Bank of Uzbekistan have ICD and the Halk Bank of Uzbekistan have signed a Line signed a Line of Financing agreement aiming at allocation of Financing agreement aiming at allocation of $15 million ICD and the government of Senegal have announced the African state s plan to relaunch a XOF100 billion ($200 million) sukuk project next year. This project is first of its kind in the West African Economic and Monetary Union (WAEMU), which aims to promote Islamic finance as an alternative instrument to finance the economies of the ICD and the state-owned Asaka Bank of Uzbekistan have reached a partnership agreement aiming to allocate an additional Line of Financing (LoF) facility of up to US$10 million to finance small and medium enterprises (SMEs) and other eligible customers in Uzbekistan. So far the bank has successfully utilized ICD s US$21 million SME Line of a US$5 million Shariah compliant Line of Financing (LoF) facility to the Bank to finance eligible small and medium enterprises (SMEs) in Uzbekistan. This facility is part of the US$50 million SME Line of Financing facility approved in 2013 which brought total amount of LoF facilities to US$133 million approved by ICD for Uzbekistan since 2007. Shariah-compliant Line of Financing (LoF) facility to the bank to finance eligible small and medium enterprises (SME) in Uzbekistan. This facility is part of $50 million SME Line of Financing facility approved in 2013 which brought total amount of LoF facilities to $133 million approved by ICD for Uzbekistan since 2007. member states of the union. extended during 2009-2011. ICD and Libyan Ministry of Economy to set up Shariahcompliant finance mechanisms targeting SMEs and youth ICD and the Libyan Ministry of Economy signed an agreement calling for the structure of several Shariah-compliant finance mechanisms to address the small and medium enterprises (SMEs) and the unemployed Libyan youth. The accord was signed under the auspices of President of IDBG Dr. Ahmad Mohamed Ali and in the presence of Libyan Minister of Economy Dr. Mustafa Abufunas, The finance mechanisms is planned to contribute to Libya s economic development and diversification by way of employment, stability and innovation by creating job opportunities for the youth and also new finance opportunities. ICD and Kolon to set up a pharmaceutical plant in Cote d Ivoire ICD and Kolon Group of South Korea, a diversified industrial Korean company, have signed a memorandum of understanding (MoU) in Jeddah for the establishment of a joint venture company and pharmaceutical plant in Cote d Ivoire. This partnership seeks setting up a joint venture company to set up a pharmaceutical plant and engage in the sales of pharmaceutical products in the Republic of Côte d Ivoire and in West Africa. 06 07

SNIPPETS OperatioNAL Performance by the end of 1434H (2013) JEDDAH ASIR The CEO of ICD held talks with the Director of the The CEO of ICD participated in the Future of the Industrial Initiative Center of the Small Projects and Business Investment Forum in Asir Region. Effectively, the CEO Entrepreneurship of King Abdullah University of Science intervenes in Financing Industrial Projects session by and Technology (KAUST). The objective is to explore ways presenting IDB and ICD s activities, products and services of cooperation to support the centers initiatives and pos- in Asir Region. sibility to replicate the center concept in other member countries. JEDDAH JEDDAH ICD met with Kyrgyzstan delegation, headed by the Head The IDB Board of Executive Directors has recently ap- of Economy and Investment Department of the Prime proved the sale of IDB Unit Investment Fund to ICD. The Minister s Office of the Kyrgyz Republic, to familiarize with fund is a legacy fund which is currently managed by ICD ICD s activities, products, services and modus operandi. It as a sub-mudarib. also discussed future cooperation in term of co-organizing business and investment forums. THE UNITED KINGDOM THE UNITED KINGDOM In conjunction with Deauville Partnership Investment ICD delegation, headed by the CEO of ICD, met with the Conference, the CEO of ICD signed a Letter of Intent with Managing Director of southern and eastern Mediterranean the President of European Bank for Reconstruction and Development (EBRD) to support the SMEs across their member countries in the southern and eastern Mediterranean Region. Region and senior officials from EBRD covering different sectors in MENA and Europe countries. The aim of the meeting is to present ICD and EBRD activities, products, services and modus operandi. Also, it was an opportunity to talk about future cooperation and partnership. By the end of 1434 H, the new approvals have increased ICD s Gross Approvals since inception to 267 projects in addition to 42 approvals to increase ICD s participation in the equity of investee companies, thus increasing ICD s total amount of Gross Approvals to USD 3,002.84 million. $3002.84 Million Gross Approvals By the end of Quarter 4, 1434H, ICD s exposure spread over 8 different sectors, where the Finance sector has the largest share of the exposure with 53.1% followed by Industry and Mining Sector with 24.8%. ICD s exposure stretches over 32 countries and 3 Regional Projects. Saudi Arabia holds the highest portion of ICD s exposure with 12.82% followed by Uzbekistan with 11.9% and 267 Projects Since inception of ICD Yemen 6.8%. 08 09

Organized events SOCIAL NEWS Staff gathering The Islamic Corporation for the Development of the Private Sector held its breakfast gathering at the IDB s headquarters and Iftar party in celebration of holy month of Ramadan at the Park Hayat Hotel in Jeddah. Some of staff members availed the opportunity to discuss issues including setting different investment guidelines for different regions, countries, nature of projects as well as risk management and investments in member countries. Everyone enjoyed the gathering, as it provided a platform for open discussion and an opportunity to interact with each other while presenting their point of view. Mr Khaled Al-Aboodi also expressed his appreciation to staff members for being present at the gathering and participating in the discussions fully. He also said their attendance promoted a sense of loyalty toward their Corporation. ICD launches corporate MBA program IDB cricket tourney takes-off The ICD has collaborated with one of the world s best business schools to offer a MBA program for its staff. The ICD corporate MBA program is designed to provide world-class learning exposure to the ICD Staff. This program is a self-sponsored program where the contracted Business School would be responsible for the application process based on their own established criteria. The Islamic Development Bank Group (IDBG) cricket tournament took off recently and played at the IDB s headquarters ground. The six teams taking part in this tournament are: IDB White (Finance, captain Zaid Omar Ahmad); IDB Orange (OC, Saddiq Zaffar); IDB, Green (ICIEC, Zishan Iqbal); IDB, Yellow (CS, Mohammad Shoaib); IDB, Blue (CS, Mohammed Muzammil) and IDB (ICD, Asif Mahmud) The ICD and the IDB Group Business Forum (THIQAH) organized business forum and investment conferences in North Africa and CIS countries. The aim is to create awareness about the IDB Group activities, services and products in the member countries. Also, it was an occasion to provide transition countries with the opportunity to present their investment policies and ongoing reforms to remove barriers to FDI and to showcase their investment sectors. In addition, ICD sponsored many regional and world conferences, in its member countries, to promote the Islamic finance industry. The table below shows the major events organized and sponsored during the second half of 1434 H: Event Date Location Dushanbe Business Forum 2013 18 May 2013 Dushanbe - Tajikistan Tunisia Investment Forum 13-14 June 2013 Tunisia Deauville Partnership Regional Investment Forum 25 June 2013 Cairo - Egypt G8 Deauville Partnership Investment Conference 16 September 2013 UK - London New Appointed Staff Br. Iam Nazir bin Ibrahim is from Malaysia and joined ICD in 2013 as Head of Foreign Exchange and Money Markets. His educational qualification profile includes B.A. in Economics from Syracuse University, New York, USA with specialization in International Economics from Harvard University Business School, Massachusetts, USA. Prior to joining ICD, he has worked in Treasury at Kuwait Finance House Malaysia Berhad (KFH) in 2007, heading the FX trading desk before signing off as Head of non-myr, Market Rates and Funding Desk overlooking the Bank s investment in money market and Sukuk. Sister Wan Zil Farlilah Wan Ibrahim, Malaysian national, joined ICD in June 2013 in order to set up the Treasury operation in Kuala Lumpur regional office. She holds BSc in Business Administration, from the University of Colorado, Denver, USA. Prior to joining ICD, Sister Zil was from Al Rajhi Bank Malaysia where she held the post of Vice President in Treasury, Wholesale Banking Division. She had been with the Bank for 7 years and was part of the pioneer team who helped setup the bank in 2006. She also has experienced working with several other banks including Bank Islam, Maybank, Eon Bank and Citibank. 10 11

Islamic Corporation for the Development of the Private Sector P.O.Box 54069, Jeddah 21514 Kingdom of Saudi Arabia Tel: +966 12 646 8217 Fax: +966 12 644 4427 www.idb-icd.org