IsDB surpasses $55bn in sukuk as London green bond sees record demand

24/10/2025 06:17 AST

The Islamic Development Bank has mobilized over $55 billion in sukuk issuances since 2003, with its latest ?500 million ($580 million) green Shariah-compliant bond listed on the London Stock Exchange drawing record investor demand, the bank said.

Speaking at the Global Sukuk Summit 2025 in the UK capital, the bank's Chairman Mohammed Al-Jasser said the Islamic bonds have evolved from a niche product into a globally recognized and trusted asset class that effectively links finance with tangible development outcomes.

This comes as the global ESG sukuk market hits a record high, with Fitch Ratings reporting $6.5 billion issued in the third quarter of 2025 alone, bringing the total for the year so far to $13.5 billion. The market remains concentrated in core Islamic finance hubs, with Gulf countries accounting for over half of all outstanding ESG sukuk.

Speaking at the summit, Al-Jasser said: "Sukuk represents capital with purpose, channeling financing into infrastructure, renewable energy, healthcare, and education - projects that directly serve communities."

He added: "This intrinsic link between capital markets and the real economy is what gives Sukuk enduring value."

IsDB's $55 billion issuance since 2003 includes approximately $6 billion specifically dedicated to green and sustainability-linked sukuk, highlighting the bank's commitment to financing climate-friendly and socially responsible projects.

The latest ?500 million green sukuk, rated Aaa/AAA/AAA by Moody's, S&P, and Fitch, will finance and refinance projects in renewable energy, climate resilience, and sustainable food systems across the bank's 57 member countries.

Issued under its enhanced 2025 Sustainable Finance Framework, the green Sukuk marks an important milestone for the Jeddah-headquartered bank in European markets, reinforcing its leadership in sustainable finance and its mission to mobilize responsible, asset-based investment for global development partners.

The issuance achieved five-times oversubscription, reflecting strong investor confidence in the bank's track record and sustainability mandate. Proceeds will contribute to the achievement of the UN Sustainable Development Goals.

The summit, held under the theme "Investing in Sukuk Beyond Traditional Markets" in partnership with the Financial Times Group, gathered global investors, policymakers, and financial institutions.

Speaking at the event, Saudi Central Bank Governor Ayman Mohammed Al-Sayari emphasized sukuk's role in supporting economic diversification and global financial stability, while Victoria Saporta, executive director for markets at the Bank of England, called for closer regulatory coordination to integrate sukuk into global financial markets.

The summit concluded with a collective call for regulators, investors, and development institutions to strengthen collaboration and unlock new pathways for inclusive and sustainable growth.

Arab News