Innovative Australians use $100m Green Sukuk to fund 50MW of Indonesian PV plants

As you may recollect, we're keen on the idea of Green Sukuk (Sukuk are Shari'ah-compliant bonds), designed for Islamic investors and sovereign wealth funds. Environmental protection is important in Islamic teaching.

Earlier this year we established a Green Sukuk Working Group with the Clean Energy Business Council of the Middle East and North Africa and the Gulf Bond & Sukuk Association to promote the model.

Showing us how it's done, Australian solar companies Solar Guys International and Mitabu have secured funding through a Green Sukuk for 50MW of PV projects in Indonesia. The $100m Green Sukuk is the first tranche of what will be a total of $500m. The deal is being structured by the Labuan Financial Services Authority in Malaysia.

The projects are fully funded under a Power Purchase Agreement model and every installation will "displace expensive fossil fuel power generation or bring reliable power to remote communities for the first time". They will be the first phase of a "One solar watt per person" program for Indonesia.

The Green Sukuk structure "allows SGI-Mitabu to treat solar power projects like any other infrastructure project such as a toll road or water pipeline". Most of the solar project's investment is coming "via the Middle East and Malaysia".

Trivia bonus: Sukuk is the plural of the Arabic word 'sakk', an instrument showing ownership of an underlying asset or a 'usufruct'. Sure, you knew that; but did you know that 'sakk' is the source of the word "cheque". Another financial industry wonder sourced from Arabic civilization (along with numerals themselves)!