Study to subsidise SRI sukuk issuance underway

By P Prem Kumar

The government will initiate a study to incentivise cost incurred by issuers and subscribers of Sustainable and Responsible Investment (SRI) sukuk, said Finance Minister II Datuk Seri Johari Abdul Ghani.

He said the government would consider providing a grant or special tax deduction to control the additional cost incurred by SRI sukuk issuers.

Currently, the government provides tax deduction incentive for issuers of SRI sukuk or its related products.

“If we want to increase the SRI sukuk issuance in the country, the government needs to create a conducive environment,” he said at the launching of Khazanah Nasional Bhd’s second tranche of SRI sukuk yesterday.

Johari said with such incentives, more SRI sukuk issuances could be seen in Malaysia, while strengthening the country’s position as a global Islamic finance hub.

Khazanah will issue the second tranche worth RM100 million to fund schools under the sovereign state fund’s patronage.

The second tranche was issued after it witnessed success in the SRI sukuk first tranche of RM100 million issued in 2015, Khazanah MD Tan Sri Azman Mokhtar said.

He said the second tranche of SRI sukuk would fund the rollout of Yayasan Amir trust school programme to at least 20 schools nationwide. Yayasan Amir is a not-for-profit foundation incorporated by Khazanah to improve accessibility of quality education in government schools through a public-private partnership.

“This second tranche will include a retail portion to provide individual Malaysians the opportunity to participate in supporting further implementation of the trust school programme,” he said.

Azman said the unique step-down returns structure of the SRI sukuk and option to waive the principal allow investors to make staggered contributions and donate to the trust schools programme.

As at end of last year, Yayasan Amir’s trust school programme was rolled out to 83 schools across 10 states, creating better outcomes for over 65,000 young Malaysians.

Khazanah is also in discussions with the Securities Commission Malaysia to initiate a crowdfunding campaign through which public can extend support to Yayasan Amir.