funding opportunities for investment in halal...

FUNDING OPPORTUNITIES FOR INVESTMENT IN HALAL INDUSTRY

13 July 2012

Islamic Corporation for the Development of the Private Sector

Member of Islamic Development Bank (IDB) Group

ISLAMIC DEVELOPMENT BANK GROUP 1.

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IDB Group

1975

1994 2008

ICD

IDB Key Features MDB of the Islamic World

South-South Development Financing Institution

Solidarity-based

Shariah – compliance

Pioneer in Trade Finance

AAA-rated

38 Years in the Service of Development

IDB GROUP AT A GLANCE

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Overview

Established in 1975 and headquartered in Jeddah, Saudi Arabia

Purpose: To foster the economic development and social progress of member countries in a commercially viable manner

Currently 56 member countries from the Middle East, Africa, Asia Pacific Region, South Asia and Europe

Regional offices in Kazakhstan, Malaysia, Morocco and Senegal

Field representatives in several member countries

All financial transactions are in compliance with Islamic law (Shariah )

Mission Statement

We are committed to alleviating poverty, promoting human development, science & technology, Islamic banking & finance and enhancing cooperation amongst member countries in collaboration with our development partners

Key Financial Indicators

As at November 2011 (US$ billion )

Total Assets 16.11

Authorized Capital

46.69

Paid-up Capital 6.80

Ratings Aaa/AAA/AAA

Ownership

Saudi Arabia 23.61%

Libya 9.47%

Iran 8.28%

Nigeria 7.69%

UAE 7.54%

Qatar 7.21%

Egypt 7.10%

Turkey 6.48%

Kuwait 5.48%

Others 17.14%

IDB’s unit of account 1 Islamic Dinar = 1 Special Drawing Right of the IMF Exchange rate of ID=US$1.5562 used throughout this presentation as per IMF 23 IMF 2011 IDB’s financial year is the lunar Hijrah year (11 days shorter then the solar Gregorian year ) Source : 2011 Financial Statements for each MDB

ISLAMIC DEVELOPMENT BANK GROUP : AN OVERVIEW

IDB, headquartered in Jeddah, Saudi Arabia, is a USD 50bn+ bank with 56 member countries mainly located in Asia, Middle East & Africa

IDB Group Strategic Objectives:

Promotion of Islamic financial industry and institutions

Poverty alleviation

Promotion of trade cooperation among member countries

IDB Group Priorities:

Human Development

Agriculture Development and Food Security

Infrastructure Development

Intra-trade Between Member Countries

Private Sector Development

Research and Development in Islamic Economics, Banking and Finance

IDB Group Mission: The Mission of IDB is to promote comprehensive human development, with a focus on the priority areas of alleviating poverty, improving health, promoting education, improving governance and prospering the people.

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ISLAMIC DEVELOPMENT BANK GROUP : AN OVERVIEW (cont’d)

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AAA Rating from All 3 Agencies

Supranational Development Bank

Conservative Risk Management

Diverse Markets and Products

One of the Highest Capital Adequacy Ratios Amongst Major MDBs*

Committed Shareholders

Preferred Credit Status

0% risk Weighting under Basel II &

European Commission

Source : S&P- Supranational (2011 Edition) *Multilateral Development Bank (MDB)


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Project Financing Public (Sovereign) Private (Non-Sovereign) Public-Private Partnerships (PPPs)

Insurance of Investment & Export Credit

Fund / Asset Management

Development of the Islamic Financial Services Industry

Trade Financing & Promotion of Intra-Trade between Member Countries

Capacity Development & Technical Cooperation

Islamic Economics & Finance Research and Training

Special Programs Science & Technology Program Scholarship Programs Special Assistance Program Adahi (Qurban) Project

IDB GROUP PRODUCTS AND SERVICES

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0 10 20 30 40 50

Non-Member Countries

Regional

Other Countries*

African Member Countries

Asia Member Countries

Ordinary Financing Concessional Financing

* Albania, Turkey and Suriname

Distribution of IDB Concessional and Ordinary Finance by Region

(1396H-1932 H) (% of Total)

IDB GROUP CUMULATIVE FINANCING

105

847.5

1,053.1

76,020.20

0 10000 20000 30000 40000 50000 60000 70000 80000

Special Programs

Non-Member Countries

Regional Projects

Member Countries

IDB Group Financing

ISLAMIC FINANCING BY ICD 2.

The Islamic Corporation for the Development of the Private Sector (ICD), is the private sector arm of the Islamic Development Bank (IDB), a multilateral development finance institution

IDB, headquartered in Jeddah, Saudi Arabia, is a USD 50bn+ bank with 56 member countries mainly located in Asia, Middle East and Africa

ICD was established in 1999 with an authorized capital of USD 2bn and a membership of 51 countries. It is 50% owned by IDB, 20% by public financial institutions and 30% by the member countries

The Vision of ICD is to be a major player in the development of promotion of the private as a vehicle for economic and social growth and prosperity in Islamic countries

The Mission of ICD is to complement the role played by IDB through

Providing Islamic financial services and products

Promoting competition and entrepreneurship in member countries

Advising governments and businesses

Encouraging cross border investments

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OVERVIEW: MISSION AND VISION

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ICD strategic objective is to promote private sector by: helping create jobs; providing Islamic financing capabilities in all member countries; and providing access to financing.

ICD Goals 1440 Vision

1 million jobs created

1 million low income families with access to finance

50 Islamic finance channels created / developed

Enabling environment in 10 member countries

70% of resources from the market

1-2 channels (financial institution investments) per country by 1440

3,000 enterprises per channels

(SME through to corporations in key sector)

10,000 retail users per channel

(micro enterprises and lower income families)

1 direct investment per country by 1440

(in sectors outside financial services)

OVERVIEW: ICD GOALS & STRATEGIC OBJECTIVES

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In addition to existing network/investments illustrated below, ICD is currently assessing the establishment of 6 new institutions in MENA (3), Africa (2) and Central Asia (1).

Maldives Islamic Bank

Malaysia • IILM • Asian Retakaful

Burj Bank, Pakistan

Islamic Bank of Senegal

Islamic Bank of Mauritania

Islamic Bank of Guinea

Islamic Bank of Niger Byblos Bank

Africa, Sudan

Saba Islamic Bank , Yemen

Bahrain • Elaf Bank • IIRA

Taiba Leasing Co., Uzbekistan

Azerbaijan • Caspian Intl Inv. Co., • Azerbaijan Leasing Co Saudi Arabia

• Anfaal Capital • Foras Inv. Co.

ICD: FINANCIAL INSTITUTIONS NETWORK/INVESTMENT

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USD 3.0 M

Financial Sector

2003

Mauritania

USD 2.0 M

Financial Sector

Mauritania

2005

Uzbekistan

2006

USD 1.0 M

Financial Sector

2003

USD 4.5 M

Financial Sector

Azerbaijan

2003

USD 800,000

Financial Sector

Azerbaijan

USD 1.7 M

2003

Financial Sector

Azerbaijan

2006

USD 2.0 M

Financial Sector

Uzbekistan

Financial Sector

Kyrgyz

2006

USD 4.0 M

Global Line of Financing

Kyrgyz

USD 8.0 M

Financial Sector

Indonesia

2008

PT Mandala Multi

Finance

2010

USD 10.0 M

Financial Sector

Tajikistan


Tajikistan

USD 3.5 M

Yemen

2007

Financial Sector

Lines of Finance

ICD also provide Lines of Financing to institutions in order to meet common business and social objectives especially the small and medium enterprise (SME) sector

Bangladesh

2011

USD 50.0 M

Financial Sector


Bangladesh

USD 40.0 M

Financial Sector

Azerbaijan

2010


Azerbaijan

USD 50.0 M

Uzbekistan

2009

Financial Sector


Uzbekistan

USD 42.0 M

2008

East Asia

Financial Sector


East-Asia

ICD: PROVISION OF LINES OF FINANCE

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Approved Project by Mode of Finance as end of 2011

Mode of Finance No. of Projects USD (Million) Percent

Equity 65 766.07 35.295%

Leasing 55 526.53 24.265%

Murabaha 52 535.77 24.685%

Bai al Ajil 39 233.13 10.285%

Istisna 7 119.14 5.495%

Grand Total 218 2,170.64 100.00%

Approved Projects by Country as end of 2011

Country USD (Million) Percent

Indonesia 68.80 3.17 %

Iran 114.86 5.29%

Malaysia 24.53 1.13%

Bangladesh 60.30 2.78%

Maldives 31.70 1.46%

Kazakhstan 15.50 0.71%

Grand Total 315.69 14.54%

ICD APPROVALS

ICD COLLABORATIONS WITH NON-MEMBER COUNTRIES 3.

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1 ICD formed a JV with a Korean Partner in numerous investments in ICD MC

POSCO, a world leading steel company, is a shareholder in a new steel mill in Pakistan where ICD is arranging a Syndicated Islamic Financing Facility

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ICD’S COLLABORATIONS WITH NON-MEMBER COUNTRIES

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OPPORTUNITIES IN ICD MEMBER COUNTRIES - KAZAKHSTAN 4.

KAZAKHSTAN

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9.3%

GDP growth

6.7%

653.3 $

5.4%

2011

Inflation

2.4%

Unemployment rate

Average monthly salary

Income growth rate per capita

IDB EXPOSURES & KAZAKHSTAN KEY INDICATORS

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IDB INFRASTRUCTURE PROJECT IN KAZAKHSTAN

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REPUBLIC OF KAZAKHSTAN: HIGHWAY PROJECT

Project Description: Construction of 57 kilometer 4-lane road in the Taraz Oblast (Region) of Kazakhstan A part of the mega project “Reconstruction of Western Europe- Western China International Transit Corridor” 20-years project tenure

Sponsor: Government of the Republic of Kazakhstan

Total Amount: US$7 billion

IDB Participation: UD$170million (Phase-I)

Tenure: 20 years including 4 years grace period

Financiers: IDB, WB, ADB, EBRD, JICA

KAZAKHSTAN ECONOMIC ANALYSIS - KEY STATISTICS

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1.2

7.3 7.5 7.4

7.4 8.9

2009 2010 2011

GDP Inflation

LABOR FORCE - BY OCCUPATION

GDP

USD 186.2 bn

Agriculture

USD80.4 bn

Net taxes on products and

imports

USD12.9 bn

Tertiary industries

USD96.5 bn

Construction

USD12.4 bn

Industry

USD58.4 bn

Hunting and forestry, fish

farming

USD9.6 bn

I Services 62%

I Agriculture 26%

I Industrial 12%

NEW ZEALAND AS THE STRATEGIC PARTNER

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Kazakhstan Million heads

New Zealand Million heads

Sheep 17.3 31.1

Dairy Cattle 2.2 6.2

Beef Cattle 4.1 3.8

Deer n/a 1.1

New Zealand is one of the world’s most efficient agricultural economies, with a reputation for producing internationally significant research, agriculture practices and products.

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Astana – New City (construction materials, business)

Marine port Aktau (naval transportation, marine freight)

Ontustyk (textile industry, agriculture)

IT-Park ‘Alatau’ (hi-tech, software)

Company established in free economic zone is exempted not only from paying corporate, land and property taxes but also from value-added tax.

Petrochemical Park (petrochemical industry)

Atyrau

Burabay

Burabay (tourism cluster)

KAZAKHSTAN SPECIAL ECONOMIC ZONES

3 BASIC REASONS TO INVEST, TRADE AND PRODUCE IN KAZAKHSTAN

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Favorable Investment

Climate

• POLITICAL & SOCIAL STABILITY

• STATE SUPPORT AND GUARANTEE OF INVESTMENTS (KAZAKHSTAN HAS SIGNED AGREEMENTS ON MUTUAL INVESTMENT PROTECTION)

Natural Resources

• LARGE MINERAL & RENEWABLE RESERVES (#1 URANIUM PRODUCER IN THE WORLD)

Markets

• HUB EUROPE <-> ASIA

• LARGE & FAST GROWING NEIGHBOR MARKETS (UP TO 500 MILLION CONSUMERS)

FUNDING OPPORTUNITIES IN AGRICULTURAL INDUSTRY 5.

ICD FOOD & AGRIBUSINESS FUND

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Fund Size: US$600m Turkey, Malaysia, Kazakhstan, Indonesia GCC, Pakistan, Morocco, Egypt and other Islamic countries

Target Countries Commitment-based private equity fund to be established as a limited partnership

Target Sectors: Farming Inputs & Technology Infrastructure, Livestock and

Aquaculture Food Processing Logistics & Trade

IDB – JEDDAH DECLARATION FOR FOOD SECURITY

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Jeddah Declaration: Support member countries affected by the global food crisis Total size: $1.5 billion for 5 years (2008‐2012) Target Sectors: Agriculture Livestock & Fisheries Forestry Irrigation

Future IDB Investment Programs in Food Security

• Jeddah Declaration and SPDA • Microfinance and Social Business program • Integrated Development program • Community ‐ based Development Program • Investment Program in Agriculture/PPPA • Value Chain Enhancement and Member Country AFS Cooperation Program • Multipurpose Water Infrastructure Program • Capacity Building/knowledge sharing program on water management and

environment issues • Expected Investment (2011‐2013 ) about US$ 3.0 billion

AFS- Advanced Financial Solution

OTHER SHARIAH-COMPLIANT AGRICULTURE FUNDS IN THE MARKET

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CRU Investment Management

The UK-based investment company

Shariah-compliant agriculture fund

Target size: USD 13-billion

The Gulf’s Agricultural Investment Fund

Focused on land acquisitions related to cash-crop farming

Target size: USD 350 million

Target Sectors:

Rice farming in Africa

Cereal cultivation in Eastern Europe and former Soviet countries

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CONTACT [email protected]

[email protected]

LEVEL 13, MENARA BANK PEMBANGUNAN SUITE 1, BANDAR WAWASAN

JALAN SULTAN ISMAIL, 50250 KUALA LUMPUR MALAYSIA

www.icd-idb.org

Enabling Enterprise, Building Prosperity

Disclaimer © 2012 ICD., a Multilateral Islamic Organization, based in Jeddah, Kingdom of Saudi Arabia, member of Islamic Development Bank Group. All rights reserved. The IDBG names & logos are registered trademarks. The information provided herein is confidential & for the sole use of intended recipient with discretion. Any other use, disclosures or reproduction of any information contained herein is strictly prohibited. This package & any additional information provided must be returned to ICD upon the request of ICD.

mailto:[email protected]

mailto:[email protected]

http://www.icd-idb.org/



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