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Indonesia govt issues retail green sharia bonds

JAKARTA ( – Directorate General for Finance and Risk Management of the Finance Ministry has issued retail green sukuk or sharia bonds to individual investors online (e-SBN), a senior official at the Finance Ministry said.

The sharia bonds is offered with underlying assets owned by the State as well as State Budget funded projects that are considered a green asset.

“The proceeds of the green Sukuk issuance will be supported by underlying projects that are supporting the climate change,” Director General of Finance and Risk Management Luky Alfirman said on Wednesday (04/11).

The retail green Sukuk is offered with floating with floor coupon based on the BI 7-Day Reverse Repo Rate plus spread of 150 basis points (bps).

The first repayment will be made on Jan. 10, 2020 and Feb 10, 2021, with a coupon rate of 5.50 percent, based on BI 7-days reverse repo rate at the time the Sukuk was issued, namely at 4.000 plus 150 bps.

The spread is set at 150 bps until due date, the ministry said. As for coupon rate for the first three months is set at 5.50 percent as a minimum coupon rate level, which will not change until the maturity date.

The offering date starts on Nov. 4 until Nov. 25, 2020. The allotment date is set on Nov. 30, 2020, and followed by the settlement date on Dec. 2, 2020, due on Nov. 10, 2022.

The minimum order is set at Rp1 million and a maximum of Rp3 billion. The retail green sharia bonds cannot be traded and cannot be liquidated or redeemed until the due date except there is a period of early redemption set by the government.

“We are the first country in the world to issue retail green Sukuk. This shows the government commitment to support a green development that supports climate change (program),” he said. (*)

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