Infrastructure Financing through Islamic
Finance in the Islamic Countries
105
Case 1: Khazanah Sustainable and Responsible Investment Sukuk
Khazanah Nasional Berhad (Khazanah) issued an RM100 million Sustainable and Responsible
Investment Sukuk in 2015 to fund schools under the non-profit foundation Yayasan AMIR
Trust (YAT) School Programme. YAT was founded by Khazanah to improve the accessibility of
quality education in Malaysian government schools through a PPP arrangement with the
Ministry of Education. The first of its kind, the sukuk was issued via an independent SPV, Ihsan
Sukuk Berhad (Ihsan), which planned to raise a total of RM1 billion through its sukuk
programme. The first instalment of the seven-year tenor sukuk programme worth RM 100
million was issued in June 2015. The sukuk was rated AAA by RAM Ratings Services Berhad,
reflecting Khazanah’s credit rating and was fully subscribed with interests shown from
foundations, corporations, banks, pension funds and management companies. CIMB
Investment Bank Berhad (CIMB) was the lead manager and the sukuk was structured using the
wakalah bil istithmar principle.
Chart 4.2. 12: Structure of Khazanah Sukuk Ihsan
Source: IIFM (2016: 55)
The sukuk was priced with a return guidance of 4.30% per annum. The Key Performance
Indicators (KPIs) that would be assessed over a five-year timeframe were identified to assess
the social impact. If the KPIs were fully met at maturity, the investors would forgo or
contribute up to 6.22% of the nominal value due under the sukuk. This would be considered
‘Pay-for-Success’ and reduce the effective yield to 3.5% as recognition of the social impact
produced by YAT, reflecting the social responsibility of the sukuk-holders. If the KPIs were not
met or met partially, investors would receive up to the nominal value of the sukuk as agreed
upon at issuance. The sukuk also had the option of converting the investment into a donation
at any point during the tenor of the instrument. By the end of 2016, the Trust Schools