Islamic Finance

Indonesia sells $3 bln in sukuk including a 30-year green tranche

JAKARTA – Indonesia’s government sold $3 billion in global sukuk on Wednesday (June 2) that included a 30-year green tranche.

Dwi Irianti, Sharia Financing Director at the Ministry of Finance, told Salaam Gateway the sukuk was sold in three tranches, a $1.25 billion five-year tenor, a $1 billion with maturity of 10 years, and a $750 million 30-year green paper.

The three wakalah sukuk will mature in 2026, 2031, and 2051, respectively.

They were sold at par price with a yield and coupon of 1.5% for the five-year tenor, 2.55% for the 10-year issue and 3.55% for the 30-year green sukuk.

The sovereign set initial price guidance at 1.9%, 3% and 4%, respectively.

The sukuk, which was issued by the government through the SBSN III Issuing Company, a legal entity formed by the sovereign to issue Islamic papers, will be listed on the Singapore Stock Exchange and NASDAQ Dubai.

The settlement will be taken on June 9.

The positive response from the market was reflected in the total order book of $10.3 billion, or 3.43 times the target of $3 billion.

This was also the first time Indonesia introduced a Green Sukuk with a 30-year tenor, the longest maturity for a green sukuk ever issued by a sovereign. Its proceeds will be used to finance or refinance expenditure directly related to eligible green projects, as defined in the government's green sukuk framework.

Indonesia has been consistently issuing five-year green sukuk every year since the first in 2018.

“This issuance proves our dedication and long-term commitment for green and sustainable financing, as well as pioneering financing methods in the effort to fight climate change,” said Dwi.

“The Green Sukuk issued in this offering are the fourth global Green Sukuk issued based on the ROI of the Green Bond and Sukuk Framework.”


The transaction attracted great interest from different types of investors and geographies.

The distribution of investors for the five-year tenor is 34% Asian (ex-Indonesia), 33% Islamic (Middle East and Malaysia), 16% Indonesian, 10% European and 7% in the United States, according to the ministry of finance official. 41% of the investors are banks, 30% are central banks or sovereign wealth funds or agencies, 23% are fund managers, 4% are insurance and pension funds, and 2% are private banks and others.

Investors in the 10-year sukuk are 35% Asian (ex-Indonesia), 29% Islamic (Middle East and Malaysia), 18% European, 12% in the United States, and 6% Indonesian. 40% of the buyers are fund managers, 36% are banks, 12% are central banks or sovereign wealth funds or  agencies, 10% are insurance or pension funds, and 2% are private banks and others.

The distribution of investors for the 30-year green sukuk is 34% Asian (ex-Indonesia), 27% United States, 25% European, 8% Islamic (Middle East and Malaysia) and 6% Indonesian. 63% of the investors are fund managers, 19% are banks, 12% are insurance or pension funds, 5% are central banks or sovereign wealth funds or agencies, and 1% are private banks and others.

CIMB, Citibank, Dubai Islamic Bank, HSBC and Standard Chartered acted as Joint Lead Managers and Joint Book runners.

HSBC and Standard Chartered acted as Joint Green Structuring Advisors.

PT BRI Danareksa Sekuritas and PT Trimegah Sekuritas Indonesia Tbk acted as Co-Managers.

The sukuk was rated Baa2 by Moody's Investor Service, BBB by S&P Global Ratings Services and BBB by Fitch Ratings.

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