SC expands grant scheme to promote sustainable devt fund raising

KUALA LUMPUR: The Securities Commission Malaysia (SC) has expanded its Green SRI Sukuk Grant Scheme to encourage more companies to finance green, social and sustainability projects through Sustainable and Responsible Investment (SRI) sukuk and bond issuance.

With this expansion, the grant is now renamed SRI Sukuk and Bond Grant Scheme and is applicable to all sukuk issued under the SC’s SRI Sukuk Framework or bonds issued under the ASEAN Green, Social and Sustainability Bond Standards (ASEAN Standards).

In a statement today, the SC said the scheme, administered by its affiliate Capital Markets Malaysia, is now opened for application, where eligible issuers can claim the grant to offset up to 90 per cent of the external review costs incurred, subject to a maximum of RM300,000 per issuance.

It noted that as announced in Budget 2021, income tax exemptions are provided for the recipients of the SRI Sukuk and Bond Grant Scheme for a period of five years until 2025.

The Green SRI Sukuk Grant Scheme was established in 2018 with a size of RM6 million to assist issuers in defraying up to 90 per cent of the external review costs for green SRI sukuk. To-date, it has benefitted eight issuers involved in renewable energy, green building and sustainable projects.

“As a regional leader in sustainable and responsible investment, Malaysia’s capital market offers companies efficient and reliable access to financing of sustainable projects that can positively contribute to the environment and society, in alignment with the country’s commitment to the Sustainable Development Goals and the climate change agenda,” SC chairman Datuk Syed Zaid Albar said.

Already recognised as a pioneer in Islamic finance and more recently for climate-friendly sukuk offerings, Malaysia made up 19 per cent of the sukuk and bonds issued under the ASEAN Standards, the capital markets regulator said.

As at December 2020, RM5.4 billion SRI sukuk had been issued under the SRI Sukuk Framework, of which 58 per cent or RM3.1 billion are also recognised under the ASEAN Standards, and another RM635 million bonds issued under the ASEAN Standards.

“This signifies the demand for an asset class that meets the criteria for Shariah as well as sustainable and responsible investing,” the SC said. – Bernama