ICD ENCOURAGES CHINA-OIC JOINT INVESTMENT OPPORTUNITIES
ICD Phone: (966-12) 6361400 Phone: (966-12) 6441644 Fax: (966-12) 644 4427 Email: firstname.lastname@example.org
The Islamic Corporation for the Development of the Private Sector(“ICD”) is a multilateral development financial institution and is part of the Islamic Development Bank(“IDB”) Group.
ICD was established to support the economic development of its member countries through the provision of finance for private sector projects, promoting competition and entrepreneurship,providing advisory services to the governments and encouraging cross border investments.
ICD has an authorized capital of$4 billion. Currently, the shareholders of ICD are the IDB, 53 Islamic countries and five public financial institutions.In November 2014, Fitch rated ICD ‘AA/F1+’ with a stable outlook. In April 2015,Moody’s assigned Aa3/P-1 rating to ICD with a stable outlook and in December2015, Standard & Poor’s assigned its‘AA’ rating to ICD with a stable outlook.
ICD PRODUCTS AND SERVICES
1. Long and Short-term Financing
ICD finances private sector entities and greenfield or expansion projects directly through equity participation, the purchase of assignable bonds and term financing. ICD also extends short-term finance to cover working capital and/orraw materials requirements of private sector entities through Murabaha or Purchase and Leaseback for a tenor of up to 24 months. ICD can also play a role in mobilizing resources for financing a project through co-financing or syndication.
2. Developing Islamic Financial Institutions and Extending Lines of Finance
ICD strives to nurture and empower identified channel partners, by setting up or aiding existing development banks in driving development and growth in the Islamic world. This vertically leverages two key instruments in order to extend financial aid: Institutional Equities and Lines of Finance.
3. Advisory Services
ICD provides a wide variety of advisory services to governments, public entities and private entities of member countries with an aim to create the ideal environment to facilitate private sector investment and also to assist companies in achieving their potential.The range of services include assessing the business environment of member countries, plus project finance advisory,raising funds though the issue of Sukuk, development of Islamic capital markets and encouraging the development of the business environment for SMEs.
4. Asset Management Services
ICD supplements its own balance sheet by sponsoring / creating private equity funds as well as other special purpose vehicles in order to provide the IDB Group and other investors with access to projects that provide commercial returns as well as meet the developmental needs of member countries. ICD acts as a fund manager and/or general partner with other fund managers to sponsor and create special purpose vehicles along with third party investors including but not limited to IDB and ICD; other Multilateral Agencies; Sovereign Wealth Funds; Government Funding Vehicles and High Net Worth Individuals.
CHINA & ICD
With a more inclusive foreign policy,including a renewed stance on the Middle East and Africa, Chinese president Xi Jinping has set the motion for greater China-OIC relations –with the ‘One Belt, One Road’ initiative a central pillar to China’s grand strategy.In light of this development, in March2016, ICD hosted its inaugural groundbreaking event “China-OIC Forum2016” in Beijing to connect investors and regulators from Asia, Africa and the Gulf with senior decision-makers of the world’s second-largest economy.At the side-lines of the landmark China-OIC Forum 2016 in Beijing,a memorandum of understanding (MoU) was signed between ICD and China-Africa Development Fund (CADFund), a Beijing-based private equity firm focusing on Africa. The MoU envisages enhancing trade and investment opportunities in 19 African countries through co-financing and co investments,with the aim of promoting inclusive growth and financial inclusion.Research collaboration and capacity building programs that are tailored and demand-driven will also be conducted to better serve target markets. In addition, efforts will be focused on boosting support for Africans mall-and-medium enterprises (SMEs),widely recognized as an important economic driver and key contributor to sustainable GDP growth.Furthermore, ICD and CNB MInternational Engineering Co.(CNBM-IE) have signed a MoU to conceptualize, develop and structure a global scheme for the development of social infrastructure projects in ICD’s 53member countries. Under the scheme,a Public-Private-Partnership (PPP) mode of development called “Design-Finance-Build-Lease-Transfer” (DFBLT) will be utilised in order to meet the funding gap.Under the early stages of the proposed DFBLT scheme, ICD will lead the global marketing and financing-arrangement activities, while CNBM-IE will conduct all Engineering, Procurement and Construction Management (EPCM)activities. It is envisaged that development financial institutions and donor countries including the industry players in the member countrieswill play a major role in the successof this scheme.
Since the 1970s, China has taken pivotal steps to integrate into the world market and its rapid rise forma high-growth emerging economy to a powerful global player has indeed bee none of the most extraordinary feats of recent history. Over that period, the country has undergone a shift from alargely agrarian society to an industrial powerhouse, underpinned by economic reforms and the introduction of opendoor policies. This process resulted in a rapid advance in output per capita,lifting millions of people out of povertyand establishing a thriving middle class.Currently the world’s second largest economy, China offers a multitude of opportunities in which Islamic finance has a profound role to play.
In light of this context, ICD released its latest report entitled “China: The Time is Now” at the landmark China-OIC Forum2016. The report entails three sections:
• Section 1: The History of China’s Economic Development: “A Rocky Road from Socialism to Consumerism”
• Section 2: China’s Economic Landscape: “Calibrating China’s Economy”
• Section 3: Islamic Finance in China:“An Impetus to Growth”