The President’s Five-Year Programme PROGRESS AND ACHIEVEMENTS
THE FUTURE
The Road to the SDGs
The President’s Five-Year Programme PROGRESS AND ACHIEVEMENTS
The Road to the SDGs
The President’s Five-Year Programme PROGRESS AND ACHIEVEMENTS
DISCLAIMER The findings, interpretations and conclusions expressed in this publication aim to reflect the views of the Islamic Development Bank (IsDB). IsDB does not guarantee the accuracy of the data included in this publication and accepts no liability for any consequence of their use. This publication is provided without any warranty of any kind whatsoever, either express or implied. Nothing herein shall constitute or be considered a limitation upon or waiver of the privileges and immunities of IsDB, all of which are specifically reserved. The designations employed and the presentation of material in this publication do not imply the expression of any IsDB opinion concerning the legal status of any country, territory, area, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The use of maps, reference to a particular territory or geographic area, or by using the term “country” in this publication does not imply official endorsement or acceptance thereof by the IsDB nor does IsDB intend to make any judgements as to the legal or other status of any territory or area presented herein.
ISBN: 978-1-9160325-1-4 The Road to the SDGs The President’s Five-Year Programme Progress and Achievements
Text © Department of Strategy and Transformation (DoST): [email protected] Islamic Development Bank All rights reserved
Published in 2021 by the Islamic Development Bank www.isdb.org
[ i ] t the Islamic Development Bank (IsDB), we are working to improve the lives and livelihoods of those we serve. We promote social and economic development in member countries (MCs) and communities worldwide, delivering impact at scale. We provide the infrastructure and training A needed for people to lead better lives and achieve their full potential. We believe all people have the right to live in dignity and prosperity, and that the best route out of poverty is to nurture economic growth while leaving no one behind.
We equip people to drive their own economic and social progress at scale, putting the infrastructure in place to enable them to fulfil their potential. We build collaborative partnerships between communities and nations across the public and private sectors.
We foster innovative and sustainable solutions to the world’s greatest development challenges, as we work towards the United Nations Sustainable Development Goals (SDGs).
[ ii ] he global development agenda, represented by agreement on the SDGs along with subsequent agreements (such as COP21 on climate change, the Addis Ababa Action Agenda, and the Sendai Framework for Disaster Risk Reduction), constitutes a trajectory shift in the global development dialogue. Operationalising this agenda requires a different business model that Temphasises market-led growth, science, technology and innovation, and global partnership for development. It is time to shift global development action from short-term interventions addressing narrow and immediate pain points to tackling the root causes hindering sustainable growth.
IsDB has fully embraced the 2030 Agenda by formally incorporating the SDGs in its work programming. The SDGs gaps in its MCs lie at the heart of decision making. MC interventions are mapped against the SDGs, which provide a clear picture as to how our resources are adding value towards the attainment of the SDGs and how IsDB is playing its role effectively in the multilateral development bank ecosystem.
[ iii ] ACKNOWLEDGEMENTS
We thank all the organisations whose knowledge of development finance and other related subjects has informed this publication. They bring many insights into the global challenges of multilateral development banking in the twenty-first century.
This publication covers a wide range of complex topics and incorporates content from multiple stakeholders. Sources include member countries, United Nations bodies, various agencies and industry experts.
The Future is a series of publications led by IsDB Department of Strategy and Transformation (DoST) and dedicated to forecasting economic needs and helping MCs to be better prepared to meet them. The chief aim of the series is to help create global coalitions driven by a shared vision of the future of humanity.
For further information, contact Dr Ahmed Elkhodary, DoST Director: [email protected]
[ iv ] Contents
Highlights of the P5P Accomplishments. . . . .1 Empowering public and private sectors,
philanthropists and people ...... 62
STI Policy and Operational Strategy...... 64 Doing business differently ...... 26 Launching the Engage Platform ...... 66
Building the infrastructure...... 28 Transform Fund...... 68
Agriculture and rural development ...... 30 Islamic Finance Country Assessment Framework...... 70
Water Sector Policy ...... 32 Economic Empowerment Investment Policy...... 72
Education Sector Policy...... 34 Islamic Financial Sector Policy ...... 74
Health Sector Policy ...... 36 Reverse Linkage Policy...... 76
Energy Sector Policy...... 38 IsDB-ITFC Sovereign Agriculture Trade Fund...... 78
Transport Sector Policy ...... 40 Enhancing National Ecosystems for South-South and Triangular Cooperation...... 80 Urban Sector Policy...... 42 Building MCs' intellectual property capabilities...... 82 IsDB-APICORP Economic Infrastructure Facility...... 44 Enhancing the enabling environment for private sector Crowding-in market resources: investment...... 84 first project of its kind in Kazakhstan...... 46 Maritime Investment Initiative and the blue economy...... 86 Enhancing MCs' Evaluation Capacity ...... 48 Harnessing private sector solutions through Reverse Unlocking finance to access energy through crowdfunding . 50 Linkage...... 88
Global Partnership for Education Alliance: enabling Institutionalising economic empowerment methodology. . . . 90 more and better financing ...... 52 Strengthening the economic resilience of vulnerable THIQAH online initiatives...... 54 enterprises in response to COVID-19...... 92
Supporting Egypt's clean energy projects...... 56 Bridge Platform: establishing a global network of financial institutions...... 94 Change for impact: transforming agriculture and rural development in MCs...... 58 Arab-Africa Trade Bridges Programme ...... 96
Regional Cooperation and Integration Policy...... 60 West African SMEs...... 98
[ v ] Contents
Enhancing private sector resilience through the IsDB–ISFD NGO Empowerment for Poverty BRAVE Programme...... 100 Reduction Programme...... 140
Awqaf Properties Investment Fund...... 102 Youth Development Sector Policy ...... 142
Islamic Finance Capacity Building and Saudi Gelatin and Capsules Co ...... 144 Awareness Programme...... 104
Leaving no one behind...... 106 Building an agile organisation...... 146 Women’s Empowerment Policy ...... 108.
Civil Society Engagement Policy...... 110 Growing sustainably...... 148
Fragility and Social Resilience Policy...... 112 Financial Sustainability Model...... 150
Restoring sight for a clear path out of poverty ...... 114 First IsDB Green Sukuk ...... 152
Social Outcome Guarantee through the One WASH Fund . . . .116 Project Financial Management Policy Framework...... 154
Catalysing resources for the Gaza Central Desalination Green finance accreditation...... 156 Plant Programme...... 118 Global Value Chains Community of Practice...... 158 COVID-19 Strategic Preparedness and Response Programme ...... 120. Sustainable Development Goals Community of Practice. . . .160
Skills-centric empowerment of women and youth — Member Country Partnership Strategy 2 0...... 162 Bangladesh pilot...... 122 Cash Waqf Sukuk ...... 164 Lives and Livelihoods Fund...... 124
Revolutionising the Scholarship Programme...... 126 Managing for results...... 166
Mainstreaming climate resilience in IsDB operations...... 128 Integrated Strategic Programming Framework...... 168
Economic Empowerment Fund for the Palestinian People. . . .130 Global value chains analysis methodology ...... 170
Saving Women’s Lives from Cancer...... 132 Environmental and Social Safeguards Policy ...... 172
Smart education and skills development for refugees. . . . . 134. Impactful selectivity through the Project Qualification and Prioritisation tool...... 174 Global Islamic Food Security Platform...... 136 Project Portfolio Dashboard...... 176 KAAP mobile medical units...... 138
[ vi ] Contents
Revamped annual development effectiveness reporting. . . .178 MDBs’ first joint report on SDGs contributions...... 218
Timely monitoring of Senegal's SDGs data...... 180 Future of the finance industry...... 220
Future of the agri-food industry...... 222 Enhancing governance ...... 182 Future of the petrochemical industry...... 224 Integrated Control Framework...... 184 Future of the mining and construction industry...... 226 Decentralisation: RHs bring IsDB Group closer to the field. . . 186 Future of the textiles and apparel industry...... 228 Fund Management Framework...... 188 Blockchain-based Global Coordination Platform...... 230 Disbursement Handbook developed...... 190. Country Platforms: fourth-generation e-Disbursement Platform...... 192 development finance ...... 232
Reform package for the Waqf Fund...... 194 Programming for resilience in response to climate change and other challenges facing MCs...... 234 Environmental, social and governance risk ratings ...... 196.
COSO Framework...... 198 Africa...... 236
Enterprise Risk Management Programme ...... 200 Guinea — A post-COVID-19 restart strategy...... 238
New Investment Management Framework...... 202 Niger — A post-COVID-19 restart strategy...... 240
Business Continuity Management Framework...... 204 Senegal — A post-COVID-19 restart strategy...... 242
Modernisation and total quality management of shared Nigeria — A post-COVID-19 restart strategy...... 244 administrative services...... 206
Asia...... 246
Indonesia — A post-COVID-19 restart strategy...... 248 Shaping new frontiers ...... 208
Global ...... 210 The way forward...... 250 Reglobalisation: IsDB’s strategic positioning for the G20. . . . 212 Doing business differently...... 252 A post-COVID-19 unifying vision for MDBs ...... 214
Governors’ Roundtable...... 216
[ vii ] List of abbreviations
10YS...... 10-Year Strategy EIB ...... European Investment Bank
ADB...... Asian Development Bank EIF...... Economic Infrastructure Facility
ADER...... Annual Development Effectiveness Report ERM...... Enterprise Risk Management
AfCFTA...... African Continental Free Trade Area ESG...... Environment, social and governance
APIF...... Awqaf Properties Investment Fund ESSP...... Environmental and Social Safeguards Policy
BED...... Board of Executive Directors EV...... Electric vehicle
BoG...... Board of Governors FCD...... Financial Control Department
BRAVE...... Business Resilience Assistance for Value- FDI...... Foreign direct investment Adding Enterprises FI ...... Financial institutions CGS...... Corporate Governance Section GCC...... Gulf Cooperation Council COO ...... Chief Operations Officer GCF...... Green Climate Fund CoP...... Community of Practice GCP...... Global Coordination Platform CP ...... Country Platform GIF...... Global Infrastructure Facility CPO...... Chief Product and Partnership Officer GVC...... Global Value Chain CSO...... Civil society organisations IAEA...... International Atomic Energy Agency CUC...... Cumulative undisbursed commitments ICF...... Integrated Control Framework DEFAI...... Development Finance Assessment Index ICIEC ...... Islamic Corporation for the Insurance of DoA...... Delegation of Authorities Investment and Export Credit
DoST ...... Department of Strategy and Transformation ID...... Islamic Dinar
EBRD...... European Bank for Reconstruction and IFS...... Islamic financial sector Development ILO...... International Labour Organization EC ...... European Commission IMDT ...... Information Management and Disruptive EED...... Economic Empowerment Department Technology Department
EEFPP...... Economic Empowerment Fund for IMF...... International Monetary Fund Palestinian People
[ viii ] List of abbreviations
IsDB...... Islamic Development Bank RH...... Regional Hub
IsDB Group. . . . Islamic Development Bank Group RL ...... Reverse Linkage
IsDBI. . . . Islamic Development Bank Institute RMD...... Risk Management Department
ISFD...... Islamic Solidarity Fund for Development SDGs...... Sustainable Development Goals
ISPF...... Integrated Strategic Programming Framework SFD...... Social Fund for Development
ITFC...... Islamic Trade Finance Corporation SMEs...... Small and medium-sized enterprises
IWP...... Integrated Work Programme SPRP...... Strategic Preparedness and Response Programme KPI...... Key Performance Indicators SPV...... Special purpose vehicles LDMC...... Least developed member countries SSC...... South-South cooperation LLF...... Lives & Livelihoods Fund SSTrC. . . . South-South and triangular cooperation LMIC...... Low- and Middle-Income Countries STI...... Science, technology and innovation LoF...... Line of financing TA...... Technical Assistance M&E...... Monitoring and evaluation UNDESA. . . . . United Nations Department of Economic and MC...... Member country Social Affairs
MCPS. . . . Member Country Partnership Strategy UNDP...... United Nations Development Programme
MDBs...... Multilateral development banks UNESCWA. . . . United Nations Economic and Social Commission for Western Asia MoU...... Memorandum of Understanding UNOSSC ...... United Nations Office for South-South MSMEs...... Micro, small and medium-sized enterprises Cooperation
OCR...... Ordinary capital resources WASH ...... Water, sanitation and hygiene
OED...... Operations Evaluation Department WB...... World Bank
OIC ...... Organisation of Islamic Cooperation WIPO...... World Intellectual Property Organization
P5P...... President’s Five-Year Programme
PPP...... Public-private partnership
[ ix ] The Islamic Development Bank is working for a SUSTAINABLE FUTURE
Leading through Looking to the Creating an partnership, working future through environment with our MCs to our new business that is conducive support them in model and the to successful meeting their President’s Five- cooperation development goals Year Programme, with donors and and tackle complex ensuring that goals investors, taking a global challenges are actionable and visionary approach progress measurable to development finance and leading in Islamic finance
Ensuring long-term sustainability for our MCs by being a responsive organisation that leads by example in times of global crisis, acting for a better world
[ x ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
Highlights of the P5P Accomplishments
By Dr . Bandar Hamza Hajjar President, IsDB
In 2017, I launched the President's Five-Year Programme (P5P) (2017-2021) entitled "The Road to the SDGs in a Fast-Changing World" . The programme detailed the initiatives we intended to deliver on over the following five years, as well as the new IsDB business model . The programme was released as a book in IsDB's three languages: Arabic, English and French .
Today, five years after launching the P5P, I am pleased to share the accomplishments achieved .
As mentioned in this book, the accomplishments reflect a story of institutional transformation towards a prosperous present and a bright future for IsDB and its member countries (MCs) . IsDB has revived itself so as to be, as its founders wanted it, pioneering, proactive and agile in meeting the needs of its MCs and in its interaction with the global development agenda . The transformation was not an easy process; it was fraught with challenges and difficulties that had to be addressed to avoid the truly painful probability of failing to read the present and foresee the future . Moreover, replicating traditional approaches reflects lack of adaptability to rapid changes in economic conditions .
The repercussions of the COVID-19 pandemic have reasserted the postulate we presented five years ago; that we need to think differently and work differently to achieve different results .
Our pursuit of change and transformation is a story of aspiration, determination and will, that was nurtured by the Board of Governors, Board of Executive Directors and MCs, especially our host country, the Kingdom of Saudi Arabia . To them all we owe our deepest praise and appreciation .
I must also thank my colleagues at IsDB for their substantial contributions towards operationalising and furthering the initiatives from conception to implementation .
Together, we devised more than 100 initiatives .
Investing in the future .
[ 1 ] OUR THEORY OF CHANGE
If, as a starting point, MCs can mobilise only 1% of global markets' resources to expand domestic industrialisation in competitive industries, they can close their SDGs' financing gap, estimated at US$ 1 trillion, and create 10 million jobs annually
Shaping new frontiers for Creating impact the smart way Building an agile organisation development
Applying the 80/20 principle, Attracting global markets As a central hub capable of by focusing on the specific requires MCs to embrace orchestrating such comprehensive industries where MCs have a comprehensive programmes MC programmes, IsDB is comparative advantage, shows characterised by transformations reinventing itself into an agile that these countries have the along six result areas: organisation that can take its MCs potential to trigger a process of to new frontiers for sustainable u reglobalisation that unlocks the Improving access to market growth along six tracks: 1/5/10 opportunity: information to promote transparency and thus u Improving IsDB visibility u US$ 1 trillion can be mobilised investment u Crowding-in resources from by MCs from global market u the market resources in areas of Maximising intra-OIC value- comparative advantage added as one global trade u Building new organisational block capabilities u 5 industries of comparative u advantage represent a solid Doing business the Industry u Decentralising functionally starting point for expanded 4.0 way to meet rising global and geographically domestic industrialisation productivity expectations u u Ensuring sustainable financial u 10 million jobs can be Building an enabling growth created annually as a result infrastructure for green value chains to save the planet and of the expanded domestic u Managing for development sustain resources industrialisation results u Repositioning finance for development by aligning risk with real economic growth
u Building resilient market systems that leave no one behind
[ 2 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
In reading the initiatives, the reader, especially if not 90 million people. As such, failure to provide jobs has specialised in the same field, might wonder about many economic, social and security implications. Moreover, things. For instance, why did IsDB develop a new business MCs need about US$ 1 trillion annually to implement model? What is in switching to the new business model the SDGs, while aggregate developmental funding from for our MCs? What would have happened had we not multilateral development banks (MDBs), including IsDB, switched to the new business model? What is the link ranges from 160 to US$ 170 billion annually. A leap from between IsDB's new business model and the pressing billion to trillion figures is thus required. These challenges issues of development, such as climate change, external are exacerbated by the steady increase in MC population, debt, refugees, protectionism, poverty, unemployment, expected to rise from 1.7 billion in 2015 to 2.2 billion innovation, etc? That is why I found it best to present by 2030. Added to the rapid and successive changes those issues in Q&A form to enhance readability and around the world, all indicators point to an emerging facilitate better comprehension of the initiatives. new world order featuring economic, financial and social decentralisation and accelerated protectionism. Such an order is driven by unprecedented technological progress QUESTION: In October 2016, IsDB entered a new stage embodied in the various Industry 4.0 applications and when its new President assumed office. A hundred their direct and indirect impact on the way countries days later, in January 2017, the P5P and the new and public and private institutions are managed, and on business model were announced. What are their main the patterns of financing, production, consumption and features? Why were they developed and what are their investment. This new order has lucidly manifested its contemplated results? features during the COVID-19 pandemic.
ANSWER: When I assumed office as President of IsDB In the near past, discussions on such developments in 2016, I made a deep reading of the existing economic were more like speculation and science fiction. However, regional and global landscape and future economic today such fiction has become reality on the ground projections. My aim was to identify the optimum business with the developments in robotics, artificial intelligence, model for IsDB to help its MCs build strong, diverse and the Internet of Things, big data, drones and blockchain viable economies capable of creating jobs, attracting technology. Such technological and digital advances domestic and foreign investment and fulfilling their have an impact on the survival of industries in which our commitments to achieve the SDGs, the Paris Agreement MCs enjoy comparative advantages as well as on their (on climate change) and IsDB’s Articles of Agreement. competitiveness, because innovation is the main driver of growth and competitiveness. To put this into perspective, let us take a look at the economic and social map of the 57 MCs. We will find Adding the unprecedented repercussions of the COVID-19 them in four continents: Asia, Africa, Europe and South pandemic to the aforementioned global economic America, with the vast majority being developing landscape, we clearly realize the importance of building countries, along with a number of least developed economies that can weather unpredictable events, countries (LDCs). Their economies all depend on especially the repercussions of climate change (for which exporting raw materials, and hence jobs, to industrialised we established a dedicated IsDB “Resilience and Social countries. However, the prices of raw materials are subject Development” department in 2018). to global factors beyond the control of their exporting countries, which affects the implementation of their These changes can only be addressed by thinking outside national development plans or even disrupts it at times, the box. IsDB needs a new work programme and business when export prices suffer sharp drops. In these countries, model that can absorb these changes towards helping the public sector plays a pivotal role in managing and MCs build viable economies consistent with the new controlling the economy, while the private sector’s world order. contribution is minor and virtually insignificant. The role of the tertiary non-profit sector is extremely modest, or even Accordingly, the P5P came out as an action plan that inexistent in some cases. includes initiatives and programmes aimed at helping MCs build and develop viable and resilient economies and This situation caused unemployment to increase and meet their commitments to achieve the SDGs, the Paris debt to worsen, widened the funding gap and perpetuated Agreement, IsDB's Articles of Agreement and the Global balance of payments deficit. The number of new job Development Agenda. To implement the P5P, a new seekers in the 57 MCs is estimated at about 10 million business model was designed under the theme “Making young people a year. By 2030, this figure would reach Markets Work for Development: 1/5/10”.
[ 3 ] The President’s Programme crafts a new business model that aims to make markets work for development to realise the 1/5/10 opportunity 1 5 10 TO INVEST TO INTO CREATE
US$ 1 5 10 MILLION TRILLION INDUSTRIES JOBS
[ 4 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
QUESTION: How can the new business model make markets work for development? What does making REALIZING OPPORTUNITIES FOR THE 21ST CENTURY markets work for development mean? And what do the numbers 1/5/10 signify? THROUGH RESILIENT GLOBAL VALUE CHAINS AGRI-FOOD ANSWER: With this new business model, IsDB aspires to be a pioneering, proactive and at the forefront of developmental action, that meets the needs of its MCs. Under the second generation of member country partnership strategies (MCPS 2.0), IsDB has shifted from country programming based on financing projects as requested by MCs to proactive market-driven programming. This model focuses on selecting industries where each country has a competitive advantage then building value chains for such industries and connecting local value chains with global ones. By doing so, the country establishes an industry that provides economic added value, jobs and projects capable of attracting local and global investments.
In this endeavour to make markets work for development, IsDB assumes new roles to serve all groups, particularly the poor and the marginalised, improve livelihoods and THE FUTURE reduce poverty. The new roles are those of a catalyst, Volume 4 guarantor, transformer, facilitator and partner that leverages its strengths, including its AAA credit rating, its field presence in 57 countries and its excellent relations with non-member countries and international REALIZING OPPORTUNITIES FOR THE 21ST CENTURY organisations, to mobilize resources for its MCs from global markets and de-risk investments. This is particularly THROUGH RESILIENT GLOBAL VALUE CHAINS significant in view of our recognition that IsDB's own MINING & CONSTRUCTION resources and co-financing with other MDBs would never be enough to fill the US$ 1 trillion financing gap annually.
IsDB conducted in-depth and comprehensive studies on the following five strategic industries in which MCs enjoy relative advantages. The objective is to strengthen their competitiveness in these sectors, qualify them for Industry 4.0, and identify the trends that will shape the future of these industries in the 57 MCs by 2030 and beyond.
1. Agri-food The agricultural sector in MCs remains inadequately exploited because of the focus on primary production, preventing it from generating higher added value and creating more jobs. The COVID-19 pandemic has exposed the weakness of global food supplies and raised questions about food security and ways to achieve it. To enhance THE FUTURE their competitiveness, promote domestic value chains Volume 3 and facilitate their access to global markets, MCs need to position themselves within the complex agri-food value chains and protect the future of this industry through 2. Mining and construction modernisation and investment in science, technology and MCs have huge mineral reserves, accounting for 11% innovation (STI) and in global partnerships. They should also of the world production, but need to expand into the include public-private partnerships (PPPs) in their strategies. processing of those minerals. MCs are also rich in
[ 5 ] construction minerals; a sector that can create many jobs. This industry must be prepared for the future, given the rapid technological changes. Development finance FUTURE OF FINANCE institutions can contribute to the financing of major REDEFINING THE ROLE OF FINANCE IN AN INDUSTRY 4.0 WORLD
FUTURE OF FINANCE: REDEFINING THE ROLE OF FINANCE IN AN IN
REALIZING OPPORTUNITIES FOR THE 21ST CENTURY THROUGH RESILIENT GLOBAL VALUE CHAINS TEXTILES & APPAREL DUSTRY 4.0 WORLD
projects, particularly power generation projects for the THE FUTURE mining sector. Private investors can provide foreign direct Volume 5 investment in a fair win-win partnership, with IsDB playing the role of facilitator of such fruitful cooperation.
3. Textiles and apparel REALIZING OPPORTUNITIES FOR THE 21ST CENTURY MCs are among the largest producers of textiles and THROUGH RESILIENT GLOBAL VALUE CHAINS apparel in the world, with a vital role in the supply of raw ISLAMIC DEVELOPMENT BANK: FUTURES REPORT ON PETROCHEMICALS materials and in the various stages of the value chain. PETROCHEMICALS What is needed, however, is to increase their share in the global economy, enhance added value and create jobs to bolster their economic and social development. In this context, universities and research centres must play a key role in promoting innovation, partnerships and branding.
4. Petrochemicals Petrochemical products are undoubtedly an important source of quality jobs. Some oil-exporting MCs still import high-value petrochemicals. In response, IsDB is developing a roadmap to establish a network of cooperation with public and private entities, with a focus on innovation to generate higher added value in this sector of high growth and impact.
5. Islamic finance This is the crosscutting theme of all the other mentioned THE FUTURE industries. We consider it to be our most important tool Volume 2 to support and promote our industries and to encourage inclusion of the finance-deprived sector so as to unleash
[ 6 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
the potential of our MCs. Hence, developing the Islamic projects it finances. The developmental impact manifests finance industry is one of IsDB's key strategic areas as itself clearly in creating jobs, increasing exports and stated in the P5P and IsDB's 10-years strategy (10YS). attracting investments, thus forging a viable economy. In Unlike the conventional finance industry, Islamic finance contrast, merely financing scattered projects in various is rooted in ethics and in a particular understanding of the fields exclusively dominated by the government or the economy that only supports transactions that are asset- public sector as sole player will not enable us to achieve backed. This feature makes Islamic finance capable of the required developmental impact. producing a sound economic policy that restores fairness to the financial system, where equity and inclusiveness That is why we must “make markets work for development”, would be prime, ultimately leading to financial stability. being aware that these markets involve many stakeholders, each having a role from which a developmental impact is Such characteristics encouraged MCs and quite a number expected. However, in some countries there is only one of non-MCs to consider Islamic finance as an industry stakeholder, which is the government or public sector. which complements conventional finance in terms of products, services and institutions, and as a promising empowerment tool to eliminate extreme poverty and QUESTION: How did MCs react to IsDB's new business promote common prosperity. IsDB has consistently been model? responsive to requests from those countries to help them develop the necessary legal and regulatory framework to ANSWER: The Board of Governors, which comprises establish this industry. MC ministers of finance and planning, and the Board of Executive Directors praised the new business model. IsDB The new business model provides us with three historic has received requests from a number of MCs expressing opportunities, namely mobilizing and investing US$ 1 their desire to join the second generation of Member trillion annually in 5 industries in the 57 MCs to create 10 Country Partnership Strategy (MCPS 2.0) applying the million jobs. That is what is meant by 1/5/10. Our MCs new business model. These include Guinea, Indonesia, form a broad market that would give rise to significant Malaysia, the Maldives, Niger, Nigeria and Turkey. IsDB mutual benefits once it engages itself in those 5 industries intends to implement MCPS 2.0 over the next five years, and taps into their products. Each country would use delivering 11 MCPSs a year. its comparative advantages to serve other countries. As such, IsDB would be assuming its role as a catalyst to provide opportunities to integrate local value chains QUESTION: Is it easy and feasible to mobilize US$ 1 all over the world, which would allow expanding those trillion of investments in MC projects? markets and realising sustainable empowerment. ANSWER: Mobilizing the financial and human resources The Gabonese Republic was chosen to be the first country needed to implement projects in MCs is not an easy task, where the new business model would be applied. A but it is doable. The difficulty is not in the availability of technical team from IsDB, jointly with the public and private funds; there are approximately US$ 300 trillion in the sectors in Gabon, identified two sectors where the country global capital market awaiting investment opportunities has competitive advantages: the manganese and timber and projects that are feasible in terms of profitability and industries. Accordingly, IsDB conducted an economic developmental impact. The real difficulty is twofold: the and financial feasibility study, designed the local value lack of well-studied projects that would clearly inform the chains of these two industries and linked them to global investor of the underlying risks and opportunities, and value chains. Preliminary studies indicate the possibility the lack of a regulatory environment enabling profitable of creating 27,000 jobs and up to US$ 11 billion of added investments. value in manganese casting, as opposed to the mere US$ 1 billion in the case of producing raw manganese. Our new business model focuses on sectors where MCs There is enormous untapped potential to extend activity have a competitive advantage. It prepares projects that downstream in the value chain, thus creating additional are ready for implementation within the relevant value jobs and further stabilizing the economy. chain, cover all fields (e.g. infrastructure) and are suitable for all partners. The role of IsDB, as mentioned earlier, is We currently have requests from 17 MCs to sign Member not limited to that of a financier, but also a catalyst and Country Partnership Strategies (MCPSs) applying the new guarantor. IsDB will establish an investment body with a business model. This model has made IsDB proactive board comprising all project co-financiers, and that body in identifying the needs of countries and prioritizing the can issue Sukuk to finance projects for each industry.
[ 7 ] Under the new business model, IsDB also works on of these strategic industries to attract their financial and building capacity and human capital, developing laws and human resources to participate in implementation, because improving the investment environment. the profits they derive from the domestic final product of these industries would encourage them to invest in these When studying the value chain, we identify the industries. This is where IsDB fits in as provider of the organisational requirements needed, the financing services guarantees necessary to secure such investments and of all kinds and the statistical and technological databases reduce their risks to a minimum by leveraging its AAA rating. needed by each stakeholder at each stage of the chain. We design projects as chains. After project design, there This model transforms IsDB from an on-demand finance are different implementation options, including PPP, where provider to a proactive institution that identifies the needs the private sector participates in the entire lifecycle of the of countries based on competitiveness. Through this new project starting from implementation to operation and, style of business, IsDB seeks to put an end to the inefficient ultimately, profitability. This would enhance efficiency and process of receiving and scheduling applications for help implement the largest number of projects possible scattered projects (most of which are sovereign projects at the same time. IsDB will go to the recipient markets that often require rescheduling) then making approvals
[ 8 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
within the limits of its financial resources. Instead, it wants With that clarification, the question can be answered directly. to focus instead on growth driven by markets, innovation and partnerships, thus shifting the essence of development For developing countries to meet their SDG commitments, from addressing symptoms to addressing causes. they must attract funding and private capital, which currently represents only 10% in the vast majority of these countries. This requires a radical shift toward a social, QUESTION: The business model reflects the transition economic and environmental investment approach that from theory to practice. This is quite evident in the considers any social or economic problem an issue with choice of an LDC like Gabon to be the first country where financial adequacy, identifies the cost of development the new business model would be applied. However, obstacles -such as unemployment and management Gabon and other developing countries lack strong incompetence- and highlights the financial gains institutions, relevant regulations, qualified personnel and resulting from addressing this problem as an investment an investment-enabling environment. How can projects opportunity for the private sector, guaranteed by IsDB of such magnitude be implemented in countries missing under the MCPS. As such, the portfolio of operations those elements? would be gradually transformed from financing separate operations and projects to implementing an integrated ANSWER: Some facts need to be explained before the programme with MCs under MCPS 2.0. To that end, IsDB question is answered. will work on the following five tracks: u IsDB is a development bank whose main function is to u Improving access to market information. This requires promote economic and social development in developing building statistical capacity, which can be done by countries and LDCs. It is the South institution whose providing technical assistance to MCs. members, unlike the other development banks, are all developing countries. It is also the only one among the u Focusing on the cohesion among OIC member states eleven MDBs to gain the AAA credit rating from the top and their participation in value chains at the national and three global rating agencies, despite the fact that none inter-OIC levels, followed by deploying Reverse Linkage as of its MCs has that rating. In other words, its high rating a tool for cooperation with global market stakeholders. reflects its own financial, administrative and governance strength. As IsDB deals with developing countries and u Addressing the weakness of private sector LDCs, it is no surprise that the mentioned elements, participation by (1) reforming the investment environment, such as laws, institutions and an investment-friendly not only to attract investors but also to encourage the environment, be missing. private sector to reinvest its savings domestically; and (2) enhancing productivity and, hence, competitiveness, u Financing alone will never solve the development and ensuring sustained growth in light of the radical issues in those countries. At IsDB, we consider financing changes brought about by Industry 4.0. To that end, IsDB as only one element in an integrated package of financial will continue to focus on reforming business policies and and non-financial services. Unfortunately, the business providing scholarships for future leaders, especially in models applied in many institutions focus solely on LDCs, in addition to leveraging STI to improve productivity providing financing, in the belief that this would reposition and support entrepreneurship. Worker productivity in those countries into the group of advanced industrial MCs will be benchmarked against peers in developed countries. Development banks have invested in applying countries after implementing the programmes, especially these models, and the result is that 60 or 70 years on, in industries where MCs have a competitive advantage. most of these countries still export raw materials to advanced industrial countries, and, hence, continue to u Directing a large proportion of resources to suffer unemployment, emigration, poverty and other infrastructure projects that raise the efficiency of market economic and social ailments. This is because the players within the value chains selected in the MCPS. models applied focus on symptoms and ignore causes. There are two advantages to this method: (1) readily Poverty, unemployment and increased indebtedness are available industrial customers who have a high demand all symptoms, not causes. Focusing on the symptoms to mobilize investments from the market in these projects and prescribing painkillers is simply futile. Naturally, because they are financially feasible, and (2) addressing continuing to apply the same business model will not lead environmental sustainability issues due to the focus on to different results. That is why the new business model developing industrial infrastructure, as industrial activities was designed to target the root causes of the ailments, usually have the greatest impact on the environment. even though the treatment of causes is not easy. In this regard, IsDB will play an active role in sourcing
[ 9 ] high-quality projects to attract the private sector. As such, QUESTION: The book or report on achievements includes it can deliver more on less of its own resources. One of more than 100 initiatives that were fully or partially the targets to be achieved is increasing the number of implemented in about five years. What were the main people who benefit from the infrastructure within the difficulties you personally faced, as President, in the rapid region covered by the core value chains. Residents of the shift from an existing business model to a new one? value chain area would also be the natural beneficiaries of employment opportunities arising from the geographical ANSWER: The transition from the pre-2017 business distribution of economic activities of this chain. model to the new one and gaining acceptance for this shift internally and externally were not easy, especially u Redefining the role of Islamic finance in development, in view of the size of IsDB, which has more than 1,000 given that a strong financial services industry is critical staff members and a centralised business, with 94% to undertaking activities within value chains. Islamic of staff located at the headquarters in Jeddah, Saudi finance is uniquely positioned to lead in this domain, as Arabia. One of the most notable difficulties at the internal it combines finance and economic activity. IsDB seeks to level was to convince the staff and win their support for use this advantage, especially as the volume of Islamic the new business model. At times, even when staff are financing today exceeds US$ 2 trillion, twice the volume of convinced, they might find it hard to leave their comfort funding needed to achieve the SDGs. zones and abandon their long-time working customs. This
[ 10 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
is particularly true for staff members who have served also working on transferring global expertise in the area of the institution for long years and become programmed market regulating policies to ensure that all stakeholders to work in a certain way. The issue is one of institutional share the fruits and benefits of economic growth. culture, but we succeeded, with the grace of Allah, in making substantial changes to that culture in a short period of time. However, a great deal still remains to be QUESTION: The year 2020 was an exceptional one, done in this regard. marked with unprecedented events due to the COVID-19 pandemic. What role did IsDB play to help MCs address Another difficulty I faced during the transformation lied the repercussions of the pandemic? in the new skills required to implement the new business model. IsDB is the engine to implement the programme, ANSWER: It was indeed an exceptional year in which IsDB and it was imperative that all its parts move at the same worked simultaneously on the following three tracks: speed and efficiency. Implementing the new business model required skills in fields like value chains; science; u Launching the US$ 2.3 billion Strategic Preparedness innovation; digital platforms; crowdsourcing; economic and Response Programme (SPRP). empowerment; product development; preserving the environment, promoting governance, transparency and u Participating in the G20 meetings, under the work values; attracting and retaining top-notch calibre, presidency of the Kingdom of Saudi Arabia. application of functional and geographical decentralisation and ensuring sustainable financial growth. u Chairing 2020 meetings of the heads of MDBs.
At the external level, the major difficulty was the dire need to build individual and institutional capacities in MCs. QUESTION: What are the details of each of those tracks? Improving access to market information was a priority in capacity building, as some countries lack important ANSWER: data on market dynamics in strategic industries where they have competitive advantages that can encourage 1. Launching of the US$ 2.3 billion SPRP investment and allow identification of investment Although COVID-19, as a pandemic, is a health issue, it opportunities and the nature of risks and profits in also had economic and social consequences. Hence, any those industries. We also found that participation in solutions or assistance to address this pandemic must the development of national plans was weak in some address the health aspect, the economic aspect and the countries. That is why IsDB seeks to make the country social aspect, and must also cover the short, medium programming process a participatory platform for all and long terms. From that perspective, IsDB designed stakeholders in strategic industries, along with the the US$ 2.3 billion Strategic Preparedness and Response government sector, the private sector and civil society Programme (SPRP) with its 3R tracks (Response, Restore internally and externally. This adds value and a further and Restart). dimension to national planning. In some countries, poor private sector involvement in development requires On the Respond (addressing) track, IsDB provided reforming the investment environment, not only to attract immediate and urgent assistance focused on investors but also to encourage the private sector to strengthening health systems to enable them to provide reinvest savings in local markets and improve productivity, care for patients, build the capacity of health workers, thereby enhancing the competitiveness of MC products provide screening and laboratory tools and transfer and sustained market growth. expertise.
I also found it difficult to reach the neediest segments On the Restore (support) track, the IsDB Group focused in MCs, mostly because some countries focus on the on providing financial support for SMEs and trade to governmental sector, leaving out its two partners, namely ensure continued supplies for the health and food security civil society organisations (CSOs) and the tertiary non- sectors. profit sector, who are closest to remote areas and to the aspirations of the youth. Some CSOs focus on On the Restart (recovery) track, there are long-term certain segments, such as women and environmental measures to build strong and viable economies that can sustainability. With its new business model, IsDB is weather well pandemics and disasters by supporting currently working on converging all such stakeholders economic recovery programmes and countercyclical under the single framework of country programming. It is spending.
[ 11 ] The IsDB Group provided the three assistance packages at the rate of 3 meetings per day. Technical teams from through a single country platform based on blockchain IsDB and MCs participated in these meetings, and the technology, which provides a virtual marketplace where discussions focused on the importance of fulfilling the all partners, countries, IsDB and executing agencies necessary and urgent needs of the health and food can meet. It also ensures consistency of procedures, sectors. These virtual meetings helped get the work done coordination among stakeholders, monitoring and quickly. follow-up of operations and resource mobilisation. IsDB partnered with several executing agencies, including WHO, At the internal level, a steering committee and ad hoc task UN bodies, charities and international NGOs. forces were formed. They meet formally at least twice a week, and even more frequently when necessary to follow All information about projects financed by IsDB, partners up and expedite delivery. and executing agencies is publicly available in detail on read-only basis, as it uses blockchain technology. 2. IsDB's participation in G20 meetings The Kingdom of Saudi Arabia held the G20 presidency Transparency and governance are ensured at a for 2020 under the theme “Realizing Opportunities of the professional level and in accordance with best practices. 21st Century for All”. I received a letter from H.E. the Saudi When IsDB announced the launch of the assistance Minister of Finance inviting the IsDB Group to participate programme, it received many requests from MCs. In in the G20 meetings. IsDB participated in more than 120 response, I personally held 42 virtual meetings with meetings, including ministerial, extraordinary, Sherpa, the governors of MCs, who are finance ministers, and outreach group and bilateral meetings with a number of 3 meetings with heads of state in less than one month, countries and international organisations. Through those
[ 12 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
meetings, we sought to convey the voice of MCs and QUESTION: The debt service suspension initiative for Muslim communities in non-MCs to the world, highlighting poor or developing countries has definitely helped such the real challenges faced by developing and poor countries respond to the COVID-19 pandemic and its countries. We were also keen to reveal the investment repercussions. However, after the pandemic is over, they opportunities available in a market of 1.7 billion people will face a problem in financing their future projects due worth more than US$ 7 trillion. One of IsDB's major to the colossal amount of accumulated debt. How can contributions was the development of a comprehensive the issue of external debt be solved? Does IsDB have assessment report on global best practices in addressing any initiatives in this context? political risks. IsDB also implemented two country platforms for Somalia and Uzbekistan. Moreover, IsDB ANSWER: COVID-19 started as a health issue. However, was selected as an implementing partner of the G20 the ensuing lockdowns also gave rise to economic and Global Partnership for Financial Inclusion (GPFI) in social repercussions. Although no country has been recognition of its efforts and active contribution to GPFI spared the impact, developing and poor countries, poor initiatives and to the discussion and formulation of its people, informal workers, investors and microenterprises initiatives. Islamic finance is a participatory financing were hit the hardest. Poor countries suddenly found that gives IsDB a competitive advantage in attracting themselves before two challenging demands: (1) increasing numbers to deal with the banking system providing the funds necessary for urgent medical supplies, in MCs and Muslim communities in non-MCs. In our health sector support, food provisions and support for capacity as a GPFI implementing partner, for the financial small enterprises to ensure their survival, and (2) the inclusion of nearly 1.7 billion people around the world debt service obligations towards creditors (countries, who do not have access to banking services, I delivered a commercial or investment banks, MDBs, etc.). statement on behalf of IsDB at the G20 Leaders’ Summit, held on November 21-22, 2020. As developing and poor countries have limited resources, they cannot meet both demands concurrently. That is why 3. Chairing 2020 meetings of MDB heads the World Bank and IMF introduced an important initiative In 2020, IsDB chaired the meetings of the heads of that was discussed by MDBs in the meetings I chaired MDBs, namely the World Bank Group, the International and subsequently endorsed by the G20 countries under Monetary Fund, the International Finance Corporation, the Saudi presidency. Pursuant to this initiative, poor the African Development Bank, the Asian Development countries received approximately US$ 14 billion for health Bank, the European Investment Bank, the European Bank and food security expenditure. for Reconstruction and Development, the Inter-American Development Bank, the Asian Infrastructure Investment As such, this initiative did not help solve the external debt Bank, the Council of Europe Development Bank and the problem suffered by developing countries for the following New Development Bank. reasons:
My chairmanship of heads of MDBs meetings coincided u The initiative was designed as a temporary and time- with the Saudi presidency of G20. We held three meetings limited solution to help poor countries address the health, and discussions focusing mainly on the best ways economic and social consequences of the COVID-19 to help MCs face the consequences of the COVID-19 pandemic. This goal was achieved. pandemic. In this context, we discussed the WB/IMF Debt Service Suspension Initiative (DSSI) for poor u The initiative specifically addressed bilateral debt countries, an initiative adopted by the G20 to help poor between countries and did not cover private sector and countries channel their financial resources towards MDB debts. fighting the pandemic and mitigating its economic and social impacts. The DSSI was one of the most prominent The debts of developing countries are over US$ 50 G20 achievements, providing liquidity estimated at trillion. Over and above, those countries combined need approximately US$ 14 billion, in addition to the approval US$ 1 trillion annually for SDG-funding. This indicates by MDBs of financial resources up to US$ 230 billion an increase in external debt that impacts the global to help developing and poor countries strengthen their banking and financial system, not just poor countries. health systems, support SMEs, maintain jobs and support The previous century witnessed numerous global crises social safety nets and food security. Moreover, on IsDB's due to external debt. It has now become evident that initiative, a comprehensive report on the contribution of emerging from this snare requires a new business model MDBs to the implementation of the 2030 Agenda was to finance development in developing countries. It must developed. be a model that addresses the root causes that drowned
[ 13 ] developing countries in huge debts, not a painkiller advantages and ensures transparency, thanks to a model that only treats the symptoms. It must also be a country platform based on the block chain technology model that provides development gains to all countries, that presents projects in full detail, including approvals, advanced and developed alike. Such is the model that was disbursements and tenders. The model also guides introduced by the Islamic Development Bank under the project design and implementation using the value chain theme "Making markets work for development 1/5/10" as approach, which ensures complete, not partial, solutions I explained earlier and as IsDB actually started to apply. for industries. There are various methods for project implementation that ensure they continue in the long-term The main reason behind the increase in external debt for without stumbling. developing countries is borrowing. Indeed, borrowing is needed to finance development, realize economic growth The external debt crisis is a structural crisis largely and provide jobs for the large numbers of labour market caused by the reliance of developing countries on entrants every year, but the problem lies in the borrowing exporting raw materials to industrialised countries, with modes that do not ensure transparency and that the the prices of such materials being subject to external funding be directed to carefully studied income-generating factors and global price volatility, added to increased projects that would enable the country concerned to repay protectionism recently, which has put globalisation on its debt instalments and service. Add to that the humble either of two tracks. All these factors affect the availability role played by the private sector and the non-profit sector of foreign currency in developing and poor countries, thus in development. forcing them to resort to ever-increasing indebtedness. The situation is further exacerbated by poor performance IsDB's new business model provides comprehensive and lack of transparency. Recently, there has been an solutions and well-studied projects. It focuses on sectors increasing trend towards exchanging external debt with and industries where countries enjoy competitive public sector assets, in hope that this initiative would
[ 14 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
reduce the magnitude of external debt and, hence, the expedited cycle. In 2016, only 6% of IsDB staff were creditors would own the assets in return for full or partial working in regional hubs, while 94% ran the business from debt write-off. the headquarters. In contrast, we are currently aiming to redeploy 60% of the staff to regional hubs. We plan There are many lessons to be learned from such to have 11 regional hubs, and seven of them are already practices. However, what I would like to emphasise briefly operational. The Kuala Lumpur hub was transformed is that external debts can have a negative or positive into a centre of excellence in Islamic finance, STI, Halal impact on the lives of citizens in the borrowing countries, industry and reverse linkage. depending on the development financing model, the modes of financing, transparency and the involvement of u Designing financial sustainability programmes to the private sector in development. It is my view that IsDB's ensure that IsDB maintains its financial soundness and new business model includes many solutions that can its AAA credit rating. Sustainability has become a critical solve the external debt crisis of developing countries. element in decision-making, by focusing mainly on the effective alignment of approvals and disbursements. Internal financial reporting controls have been put in place QUESTION: The launch of the IsDB new business model in accordance with the internal control framework of the was accompanied by an organisational migration and Committee of Sponsoring Organizations of the Treadway restructuring that included IsDB's regional hubs. What are Commission to ensure that an independent body exists the main initiatives and programmes of this restructuring? to provide internal controls similar to relevant practices of leading global organisations. IsDB has been awarded ANSWER: The P5P and the new business model had to be a recognition of delivery on the quality and improvement reflected in an organisational structure that is consistent of its financial reporting and focus on governance and with them and meets the aspirations of IsDB Group ethical practices. The delegation of authority matrix institutions, as expressed in IsDB's 40-year assessment was also amended to enhance accountability, improve report, which were for IsDB to be proactive, pioneering and coordination between the four entities that make up agile in identifying the current needs of MCs and placing the IsDB Group and reduce overlap in their activities. safeguards for the future. In this context, we have taken A separate complex was established to focus on the several initiatives since 2017, including: development of partnerships, mobilisation of external resources and new areas. An STI department was also u Developing a comprehensive strategic programming established to carry out three key strategic tasks: (1) framework to ensure that IsDB's financial and non- introducing and integrating innovation into IsDB business financial resources are effectively allocated to help realize and activities; (2) helping MCs build an integrated STI the strategic priorities and maximize the developmental ecosystem; and (3) enabling young innovating men and impact in MCs. The framework, which was the first women to achieve their ambitions with an integrated among MDBs in terms of internal and external integration, package of support, including -in addition to funding- helps ensure that IsDB meet the needs of MCs and select training and support in obtaining intellectual property appropriate interventions. The framework enhances rights. Moreover, a social development and resilience transparency in distributing resources based on strategic department was established, as well as a department to priorities and in measuring the developmental impact of help MCs achieve resilience against climate change. We activities. All our work is programmed in one framework also launched a comprehensive workload assessment according to an integrated approach in four key areas: to identify current and future staffing needs and ensure strategy, operations, finance and budget. that we have the best level of resources and the optimum size of calibre to implement our strategy and achieve our u Updating current policies and developing 22 new objectives. In other words, the assessment addresses policies to help implement the P5P in an institutional the numbers and skills required to accomplish more with manner and in accordance with international standards. fewer resources. u Applying functional and geographical decentralisation u Mainstreaming result-based management and for IsDB to be close to MCs, private sector partners, CSOs, focusing on the developmental impact of financing, rather universities, research centres, etc. This will enable IsDB's than the volume of financing and interventions, so that transformation into an organisation with a light structure the impact of every dollar spent for development on the and higher quality in project implementation, leveraging ground can be identified. cloud technologies and platforms. This, in turn, will lead to reducing project operational costs as a result of the u Improving IsDB's media presence, enhancing its
[ 15 ] visibility at the forefront of the global development QUESTION: The STI gap is widening by the day between landscape and making it proactive rather than reactive to developed and developing countries. Innovations and developments. technology are determinants of competition among countries in different industries. Does IsDB have u Building capacity in areas where IsDB lacks sufficient programmes or initiatives to help MCs build an STI expertise, such as programming using value chains, ecosystem? crowdsourcing platforms, STI, mobilising resources creatively, etc. IsDB has resorted to forging partnerships ANSWER: Science, technology and innovation have with other institutions and seconding selected employees replaced natural and financial resources as the main to accelerate the transfer of global expertise in the area drivers of economic growth now and in the future. of policies that control the operation of markets, thus ensuring that everyone shares the benefits of economic Currently, there are countries that do not have natural growth and maximizing the impact of interventions. resources or have limited financial resources, but have been able to rank high on the list of country GDP and u Developing regulations that govern recruitment and average per capita income. Innovation has contributed human resources in general. to reducing poverty and finding effective solutions for educational, health, environmental, economic and other u Turning to the use of digital systems and eliminating issues. International data from the UNESCO Institute the use of paper in all IsDB business and transactions. for Statistics indicate that the United States, China and This is a quantum leap in the IsDB working environment. Japan ranked top in terms of spending on science and Business documents, correspondences, service requests innovation, and that 44% of international companies and approvals are made 100% electronically, in a have plans to increase spending on innovation and paperless fashion. The savings are estimated at US$ 14 development. If we take the example of Uber and Careem, million per year. we find that they do not have any physical assets such
[ 16 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
as cars, buildings and the like. All they have is new refugees in the world. Five origin countries (Afghanistan, untraditional ideas and electronic applications with a huge Myanmar, Somalia, South Sudan and Syria) account for impact in terms of the number of jobs they have provided 68% of the refugees, three of which are IsDB members. and the returns on investment they have achieved. The 12 top refugee host countries include eight IsDB MCs. Out of 50 armed conflicts the world witnessed in 2015, 30 MCs will enjoy competitive advantages in five strategic occurred in IsDB MCs, resulting in mass displacement and industries, but the question is how to maintain their position a severe humanitarian crises. and keep these industries competitive. For example, the textiles and apparel industry employs about 5 million In fact, armed conflicts and climate change are among workers in Bangladesh. As competition in the international the main causes of the increase in the number of refugees market depends on innovation and productivity, Bangladesh and forcibly displaced people around the world. Many must adapt to these changes, otherwise 5 million workers MCs are exposed to the impact of floods, severe storms will find themselves jobless. If we assume that each worker and drought. The material consequences of such changes supports 5 people, this means that 25 million people will be include job loss, house destruction, school closures, exposed to poverty and destitution. disruption of basic services such as water and electricity, uncertainty about the future and high risk of conflict. This is what motivated me to help MCs build an STI More than 800 million people have been affected by ecosystem. Practical steps began in 2017, when we natural disasters in MCs since 1970, of whom more than established the STI department. The latter prepared a 50 million were affected in the past three years alone. long-term action plan focusing on three major tracks: (1) Extreme vulnerability to natural hazards shows the need mainstreaming STI in all IsDB business and activities; (2) to invest in building resilience and avoiding dependence helping MCs build an integrated STI ecosystem; and (3) on assistance. In addition, the OECD's Fragility supporting innovators, small enterprises, universities and Framework, issued in 2020, indicated that 57 countries, research centres with an integrated package of financial including 28 IsDB MCs, suffer some form of fragility. What and non-financial assistance to contribute to finding is needed is to build more resilient societies. out-of-the-box solutions for development issues and to achieve the SDGs in education, health, renewable energy, IsDB's plan or policy to help fragile countries facing infrastructure and other areas. To achieve this plan, the problem of refugees and displaced persons rests IsDB established in 2018 the US$ 500 million Transform on four pillars: (1) investing in prevention; (2) shifting Fund to provide financial support to innovators, research from relief to development; (3) supporting recovery; and centres and entrepreneurs, and we created the Engage (4) mobilising resources for resilience. It is imperative Platform. IsDB also developed an annual programme for to link humanitarian assistance to development and training, capacity building and assistance in obtaining peacebuilding as an integrated long-term approach. intellectual property rights. It also established a strategic partnership with UNESCO and the STI profile was In partnership with the World Bank Group and the United developed at UNESCO's Global Observatory of Science, Nations, IsDB contributes to the Global Concessional Technology and Innovation Policy Instruments (GO- Financing Facility, which has so far provided nearly SPIN). IsDB also collaborated with UNESCO in supporting US$ 600 million in grants. It aims to mobilise US$ 3 billion the STI ecosystem in Uzbekistan and Mozambique. of concessional financing to the benefit of Syrian refugees Moreover, IsDB has organised STI conferences in Senegal, and their Jordanian and Lebanese host communities, Bangladesh, Niger and the UK under the auspices of expanding basic services and infrastructure and promoting heads of government and prominent figures. job creation. IsDB also established vital funds, including the Transform Fund, which invests in innovation, development and entrepreneurship, the Green Sukuk Fund and the QUESTION: The number of refugees and displaced Economic Empowerment Fund for the Palestinian People. persons in the world is constantly increasing and the We also mainstreamed climate change counteraction largest proportion of refugees is in IsDB MCs. What is in IsDB operations and financing, as well as a variety of IsDB's role in supporting refugee-hosting countries? programmes, including Reverse Linkage, the Alliance Against Avoidable Blindness, the Microfinance Support ANSWER: The number of refugees and displaced persons Programme, the Education for Employment Programme, is indeed on the rise. It has now reached 79 million the Education for Competition Programme, the Vocational refugees, the highest since World War II, with most Literacy Programme, the Economic Empowerment of them concentrated in IsDB MCs, among which are Programme for Disadvantaged Families, the Refugee the origin and host countries of the largest number of Education Programme and the Scholarship Programme.
[ 17 ] IsDB contributed to solving part of the Syrian crisis when In Yemen, IsDB was one of the first international it erupted with relief campaigns and health projects in the organisations to respond to relief and reconstruction areas of internally displaced people and in neighbouring calls. The IsDB Group contributed to financing many countries through UN organisations and international health, education and rural development projects. IsDB is CSOs. We carried out a number of projects, including collaborating with the King Salman Humanitarian Aid and rehabilitating schools inside Syria, building new schools, Relief Centre (KSRelief) in implementing the Emergency supporting the printing and distribution of curricular Support and Rehabilitation Development Programme. textbooks and organising mobile clinics in schools KSRelief is one of the largest contributors to the US$ 2.5 to treat children. IsDB also managed to attract other billion Lives & Livelihoods Fund launched by IsDB and its partners. Additionally, it contributed US$ 100 million to the partners to help the poorest people in IsDB MCs. IsDB is also Emergency Health Project in Jordan as part of the Global working with the Saudi Development and Reconstruction Concessional Financing Facility to address the challenges Programme for Yemen, which is making great efforts to arising from the Syrian refugee crisis. It also financed a provide economic and social support to the Yemeni people. project to enhance Lebanon's health sector capacity to In Somalia, despite the outbreak of civil war since 1991, enable low-income Lebanese citizens and Syrian refugees IsDB continued its activities with a number of projects in the to access primary healthcare services. areas of health, education water and sanitation.
[ 18 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
IsDB intends to work with governments and civil society than US$ 500 million to help protect tens of millions of organisations to support programmes directed towards children from preventable diseases, which truly reflects helping refugees from MCs to western countries. Such the broad social impact of Sukuk investments. There is support will be in the form of educational programmes much that we can still do. and vocational training, particularly in the early stages of refugee arrival. This initiative, in which priority is given I do not want Islamic finance to be perceived as being to women and children, was discussed with a major geared to serve Muslims only. Rather, it is a means for association in the UK and with the mayor of London. The ethical investments in long-term sustainable projects to IsDB External Outreach section will undertake expanding the benefit of Muslims and non-Muslims alike. Investors the scope of those programmes so as to include Muslim everywhere look for investments that realise returns and communities in many non-member countries. sustainability. Islamic finance has a proven track record of promoting financial, economic and social impact, as well IsDB reaffirms its commitment to support regional and as financial inclusion. In this context, the UK was the first global efforts to strengthen the link connecting peace, non-Muslim country to issue Sukuk in 2014. Al Rayan Bank relief and development. It will continue to play the role of in Britain was the first in the world to issue public Sukuk financier and catalyst through the network of developers, in a non-Muslim country. The UK has now five full-fledged helping with resource mobilisation through innovative Islamic banks, and 20 others that have Islamic product mechanisms and concessionary terms to achieve the windows. Moreover, Britain is a major hub for Shariah- common vision of “peace and development for all”. compliant insurance companies, as well as asset managers and many Islamic consulting firms. All IsDB Sukuk are issued and registered on the London Stock Exchange. The QUESTION: In a remarkable development, IsDB Financial Conduct Authority (FCA) authorised IsDB Sukuk recently issued two types of Sukuk: Green Sukuk and as a liquid financial income instrument. IsDB Sukuk are also Sustainability Sukuk. What projects have been, or will be, accepted by the Bank of England as eligible collateral for its funded by the proceeds of these issuances? And how do repos. They are also recognised by the Basel Committee for you see the future of the global Sukuk market and Islamic Banking Supervision and the Commission of the European banking in general in the light of the fintech revolution? Communities, which both consider IsDB a zero-risk development bank. ANSWER: IsDB began issuing Sukuk in 2003, reaching to date a total volume of approximately US$ 33 billion. Islamic finance, and Sukuk in particular, has huge It issues these Sukuk to expand its capacity to mobilise potential for growth. Islamic banking has grown globally resources to support development projects in MCs, by 20% over the past decade to about US$ 3.5 trillion, and consolidate its lead in the global financial markets and there is rapid growth in the Sukuk market as well. develop those markets. The proceeds of these Sukuk are used to finance projects in infrastructure, agriculture, IsDB organised the first Sukuk conference in the energy, roads, health, education and other sectors. London Stock Exchange in 2018, which was attended by prominent British figures from the government and In 2019, IsDB issued the first Green Sukuk in its history the banking financial sector, including Mr. John Glen, worth EUR1 billion. The proceeds of the issue were Economic Secretary to the Treasury and City Minister, Mr. used to finance a range of projects related to climate Sajid Javid, Secretary of State for Housing, Communities change, renewable energy, environment-friendly transport, and Local Government, Mr. Nikhil Rathi, Chief Executive of energy efficiency improvement, water management and FCA and Sir Peter Estlin, Alderman of the City of London sanitation. They were the first AAA-rated Sukuk in global Corporation. capital markets. In June 2020, after the emergence of the COVID-19 pandemic, IsDB issued its first Sustainability It organised the second Sukuk conference in Luxembourg Sukuk worth US$ 1.5 billion to finance social projects in in 2019 in collaboration with the Ministry of Finance of MCs to promote healthcare and job creation. Those were Luxembourg. It also conducts promotional campaigns to the first of their kind related to COVID-19 in the global educate investors around the world, specifically targeting capital markets and confirmed IsDB's leadership in the central banks and investment institutions. global Sukuk market. Fintech has gained a great deal of interest from companies Creativity and innovation in the Sukuk market are in Britain and the United States, given the digital revolution wonderful. For example, the Global Alliance for Vaccines the world is currently witnessing. There are 27 companies and Immunization (Gavi) issued Sukuk that raised more in Britain, 9 in the United States, 15 in the United Arab
[ 19 ] Emirates, 9 in Saudi Arabia and 13 in Indonesia. Many applications in fintech, blockchain and others. Saudi digital platforms have been launched, such as MyAhmed, Arabia, the United Arab Emirates, Indonesia, Malaysia an electronic money platform included under the FCA and Iran are leading markets for this industry. In fact, Regulatory Sandbox, the Qardus Islamic lending platform Saudi Arabia is considered one of the best markets and and the Shariah-compliant gold trading platform. There a pioneering country in the field of fintech, with a market are initiatives to launch Sharia-compliant digital banks. size estimated currently at US$ 18 billion and expected to The Wahed Invest platform has more than 150,000 expand to US$ 47 billion in the next four years. customers in 130 countries and is valued at about US$ 100 million. It is seeking to become the leading retailer of Shariah-compliant financial products. Amid these rapid QUESTION: There has recently been increased interest and successive developments in fintech, the Islamic in investing with institutions that respect environmental, Development Bank Institute has launched a number of social and governance standards. How committed is initiatives, with a view to playing a promising role in this IsDB to these standards? What are the notable examples field. Moreover, IsDB has established a centre of excellence in this regard? in Malaysia focusing mainly on Islamic finance, STI and reverse linkages to help the financial and banking sector in ANSWER: IsDB has launched a number of initiatives MCs. IsDB also established incubators at the Mohammed that reflect its keenness to comply with environmental, V University in Rabat (Morocco) and in Jakarta (Indonesia). social and governance standards in its business and activities. IsDB's commitment to these standards provides IsDB has recently issued a comprehensive report on it with greater opportunities for growth, as the number of the future of finance, part of which was devoted to investors and partners seeking to achieve an environmental Islamic finance in the light of the rapid technological and social impact, along with profitability, is increasing developments driven by Industry 4.0 and its various worldwide. Furthermore, an institution that respects these
[ 20 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
standards is viewed positively. I do not wish to repeat what Empowerment Programme through empowerment-based was mentioned above about IsDB's efforts in addressing Islamic microfinance. It focuses on providing an integrated climate change and its recent issuance of Sustainability package of financial and non-financial services. The fund Sukuk (allocated to spending on social sectors in the wake managed to combine elements of economic, social and of the COVID-19 pandemic) and Green Sukuk, as well as its governance impact. It aims to support 300,000 Palestinian launching of more than 20 sectoral policies. families, improve their living conditions and quality of life and promote productive lives and social equality. In addition, one can further emphasise IsDB's commitment to social, environmental and economic u The Saving Women from Breast and Cervical Cancer standards with a few examples: Fund is an IsDB-IAEA joint fund. Both institutions agreed to establish a project-first, rather than resource- u In cooperation with the International Federation of mobilisation-first, fund to save women from breast and Red Cross and Red Crescent Societies (IFRC), IsDB cervical cancer by providing affordable and accessible established a fund to eliminate cholera and secure water healthcare applying the public-private-philanthropic supply and hygiene. The fund aims to mobilise US$ 150 partnership for the people model (5Ps model). Its aim is million in grants from donors. IsDB will provide payable to bolster the fight against the two types of cancer that guarantees worth US$ 100 million but will not offer its affect women through early detection, diagnosis and own resources, thus saving funds for other projects. treatment. This helps low and middle-income countries At the same time, it will be able to help 29 MCs fight curb disease and mortality. In addition to IsDB, ISFD and cholera and make a positive impact on the lives of five several private sector institutions, 17 countries have million people. It will also contribute to achieving SDG 3 contributed to this fund. on health, SDG 5 on gender equality, SDG 6 on water and sanitation, and SDG 17 on partnerships. Moreover, IsDB will contribute to the implementation of the roadmap for QUESTION: It is noticeable that the developmental eradication of cholera and a 90% reduction in mortality role of the non-profit sector in developing countries is by 2030. Many private sector philanthropic donors have very modest compared to its counterpart in developed expressed interest in the fund. It is noteworthy that IFRC industrialised countries. Does IsDB have a plan to has extensive experience on the ground, having served 36 help MCs invigorate this role to contribute more to million people through similar programmes since 2005. socioeconomic development? However, it has no capacity to create funds on its own. ANSWER: If we look at developed countries, we will find u The Global Muslim Philanthropy Fund for Children three sectors: the public sector, the private sector and is a trust fund established by IsDB in collaboration with the non-profit sector, all of which are financially and UNICEF to harness social and Islamic finance towards organisationally strong and complementary. The global supporting children in emergencies, education, health, average contribution of the non-profit sector to GDP is water, sanitation, hygiene and nutrition. KSRelief and about 6%, while in developing countries it is less than the Abdul Aziz Al Ghurair Foundation of the United Arab 1%. In addition, in most developing countries we find a Emirates contributed to the fund. The fund will provide sagging public sector, a weak private sector and a non- support in the form of grants and its resources can be existent or very weak third sector. In some developing blended with IsDB's Ordinary Capital Resources. Out of countries, the non-profit sector suffers financial, legislative the fund's resources, 90% will be allocated to LDCs. This and regulatory problems and lacks diversity in its US$ 250 million fund includes a charity-based window activities, most of which are of charity or relief nature, and a Zakat-based window and is supervised by a not developmental. Some MCs have launched economic committee comprising IsDB and the donors. transformation and reform programmes, which are nonetheless focused on the governmental and private u The IsDB-World Food Programme nutrition fund is sectors. As a result, they face some challenges because an IsDB-managed multi-donor trust fund that receives the shift towards a market economy without a strong third its resources from Zakat and charity sources. It aims at non-profit sector has negative effects due to distortions combating acute and chronic malnutrition and feeding in the market system. As such, a main motive behind the infants and young children and supports SDGs 2, 3 and 17. interest in the non-profit sector is the desire to address the deficiencies caused by the market system. Therefore, u The Economic Empowerment Fund for the Palestinian when we were designing IsDB's new business model, we People was established by IsDB on the back of the wanted it to cover the three sectors and to make them success achieved in the Deprived Families Economic interlinked in a manner that would achieve inclusiveness,
[ 21 ] empowerment, integration, sustainability and benefit to MCs, I met with several governors (finance ministers) from Islamic social finance mechanisms such as Zakat, and heads of state, and briefed them on IsDB's various Sadaqa charity and Waqf. programmes, including development of the third non- profit sector. For example, during my visit to the Republic Back to the question about IsDB's role in helping MCs of Uzbekistan in September 2018, I had the honour of enhance the role of the non-profit sector. Since its meeting the President of the Republic, H.E. Mr. Shavkat inception, IsDB has been playing a distinctive role in Mirziyoyev. He shared his view of transforming the developing the Waqf sector. As we are talking about economy from a socialist to a market-based model and achievements during the period 2017-2020, I find it the programmes implemented to strengthen executive necessary to shed light on what IsDB has achieved in this and legislative institutions and build and develop a strong regard over the past five years. private sector. He was personally following up on the implementation of these programmes. I mentioned to 1. I have already pointed out that the main objective him the importance of building a Waqf sector that would of the P5P is to help MCs build a viable, diversified complement the efforts of the government and the private and resilient economy. Economic transformation and sector. He welcomed the idea and a technical team was reform require strong public, private and third non-profit dispatched from IsDB to discuss the issue with officials in sectors. Integration between the three sectors is the the relevant ministries in Uzbekistan. A financial assistance P5P's contemplated added value. IsDB plays the role of a package was allocated to carry out necessary studies. catalyst, enabler and connector for all three sectors. We have worked to implement this vision through a number In my visit to the Republic of Niger in January 2019, I of initiatives, the most important of which is to send this had the honour of meeting its former President, H.E. Mr. message clearly to the top authority in MCs. In my visits Mahamadou Issoufou. During my audience with him, I
[ 22 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
informed him of the visits I had made to some schools for reliable Waqf information to operationalise the in the capital and villages, and shared my view that the developmental role of Waqf. The centre’s areas of activity development of Niger's education and health sectors will be as follows: needs huge funds beyond the capacity of IsDB and other international financial institutions and that the resources u Create the interactive global digital Waqf platform to of the governmental sector were limited. I suggested collect scattered Waqf information, make them available to him that a Waqf sector be built to complement through a single database and provide decision makers the government's role in supporting socioeconomic with reliable information on the various aspects of Waqf. development, and expressed IsDB's willingness to help in that regard. He welcomed the suggestion and I contacted u Launch an annual Waqf forum that would bring IsDB's office in Dakar, Senegal, on that very day, asking together Waqf stakeholders from all over the world to them to send a team to Niger to share Senegal's experience consider contemporary Waqf issues, provide appropriate in Waqf, which IsDB had helped build. Financial assistance solutions, share successful experiences and devise was allocated to carry out the necessary studies. The initiatives that would represent added value. It is team drafted laws and regulations for the Waqf sector contemplated to be similar to the Davos forum, with the and helped establish a Waqf institution. A specialised staff grace of Allah. member from IsDB was appointed to manage the Waqf institution. A supreme body for Waqf was established and u Assume the form and functions of a global consultancy Dr. Hamid Algabid, former OIC Secretary-General (1989- firm in the field of Waqf that coordinates among 1996) and former Prime Minister (1983-1988) of Niger, was institutions, consolidates all efforts, contributes to the appointed as its chairman. commercialisation of programmes and projects and provides Waqf institutions with technical support towards During my visit to Guinea, I also had the honour of meeting enhancing the development of their human resources and the President of the Republic, Mr. Alpha Condé, and their institutional architecture. Al-Madina Al-Munawarah discussed with him at length the importance of launching was selected to host the headquarters of the Global Waqf an awareness and education programme in Africa on the Centre, having been venue to the first Waqf in Islam and role of Waqf in socioeconomic development. He welcomed being the actual capital of Waqf. the idea and called for a large conference on Waqf to be attended by a number of African heads of state and those 3. We have increased the authorised capital of the Awqaf interested in the sector. The conference was organised Properties Investment Fund (APIF) from US$ 100 million to by IsDB in collaboration with the Ministry of Finance in US$ 500 million and attracted five new participants. APIF's January 2019. subscribed capital was hence increased from US$ 76.41 million to US$ 98.57 million. We expect that three new 2. IsDB operates in 57 MCs in addition to Muslim contemplated contributions to APIF will further increase communities in non-MCs and plans to develop the third its subscribed capital by approximately US$ 17 million. We non-profit sector in these countries and benefit from should recall that APIF was established with the aim of successful experiences in the advanced industrialised developing real estate Waqf properties of economic and states. Hence came the idea of establishing a practical social benefit in MCs and Muslim communities in non- framework for institutional coordination among MCs. I would like to highlight an important point in this Waqf institutions in MCs, with a view to establishing context, namely the amendment of APIF's regulations so a specialised institution to improve the capacity of as to include investment in other sectors, such as industry, Waqf institutions and provide them with information agriculture and other sectors, in addition to its original field and expertise, promote innovation and use modern of real estate. This is because limiting investments to real technologies in the management and investment of Waqf estate assets also limits job creation and the social and assets and building of individual capacities. This is what environmental impacts. inspired us to establish a global centre of excellence for Waqf to achieve this vision. The centre will provide a unified 4. IsDB launched two partnership initiatives with two framework for coordination among institutions concerned UN institutions. The first is with UNICEF, the largest with Waqf worldwide, create an active partnership between international organisation working for children. Under them, enhance their efficiency, prevent the dispersal of this initiative, a fund was established to mobilise Zakat efforts, seek to develop the legislative system, transfer and charity funds and channel them towards achieving pioneering experience and expertise in the management child-related SDGs. KSRelief and the Abdul Aziz Al Ghurair and investment of Waqf and promote scientific research Refugee Education Fund joined this new fund. I take and practical application efforts. It will also be a reference this opportunity to thank them both for their pioneering
[ 23 ] initiatives. The second initiative was the launching of previous disasters remain in mind to date. When such a global dialogue on the role of Islamic social finance disasters hit poor countries that have weak infrastructure (Zakat, Sadaqa charity and Waqf) in achieving the and depend on agriculture and tourism, they lead to SDGs. It is noteworthy in this context that Zakat funds even more poverty, hunger and displacement and cause are currently estimated at US$ 300 billion worldwide. economic, social and security problems. That is why IsDB Launching this initiative was coordinated between IsDB set climate change among its priorities over the past 5 and the United Nations Economic and Social Council years. In this regard, IsDB took several measures to help under the auspices of UN Deputy Secretary-General Ms. its MCs implement the Paris Agreement, improve life and Amina Mohammed, with a view to supporting the efforts reduce emissions, including: to finance the recovery from the COVID-19 pandemic, which plunged millions into extreme poverty. u Establishing a specialised department by the name of "Resilience and Social Development" in 2018. This department has 3 divisions concerned with fragility, QUESTION: One of the P5P objectives is to help MCs climate change and crisis risk management. The implement the Paris Agreement (on climate change). department developed strategies, policies and plans What are the measures taken by IsDB towards that end? aimed at enhancing MC resilience to, mitigation of and rapid recovery from disasters caused by climate change. ANSWER: IsDB MCs are countries most prone to natural disasters caused by climate change such as hurricanes, u Issuing Green Sukuk worth €1 billion in the first ever drought and flash floods. The scenes from a number of IsDB initiative to fund environment-friendly projects in MCs.
[ 24 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
u Allocating 35% of approval amounts over the coming 5 introducing new financing instruments that would attract years to finance environment-friendly projects. IsDB's total investors, in addition to Green Sukuk. financing for the renewable energy sector amounted to approximately US$ 3.4 billion. We are working on developing a number of environment- friendly projects that would be attractive to investors u Establishing partnerships with international in the near future, while continuing to help our MCs institutions, including Sustainable Energy for All, with develop relevant laws, share successful experiences and which IsDB signed a partnership agreement to launch the expand partnerships with MDBs, the private sector, CSOs, "Sustainable Energy for All Centre" in the middle east. universities and research centres. There is an immense responsibility on the G20 nations, i.e. the industrialised u Hosting a platform for MCs interested in expediting countries that represent 80% of the global economy, towards SDG achievement in the field of energy. The platform, implementing the Paris Agreement on climate change. which was launched during the IsDB annual meeting of 2018, is a framework for company mobilisation and awareness towards achieving SDG 7. QUESTION: What would have happened had IsDB not gone through this change and launched a new business u Cooperating with UN ESCWA to issue a follow- model? up report monitoring the progress achieved by Arab countries towards energy-related SDG achievement. The ANSWER: We live in a fast-changing world where STI, report was issued on the sidelines of the United Nations electronic platforms, robots and big data are flourishing. Framework Convention on Climate Change, which was Millions of young men and women enter the labour held in Madrid in December 2019. It is an important tool markets annually. Certain jobs disappear and others to help Arab countries promote policies geared towards emerge. A country, institution or company that fails to improving energy security and enhance resilience to make changes in itself and its business model will be left climate change. behind and ultimately cease to exist. In this context, the figures for developing countries seem alarming, calling on u Participating in the organisation of workshops and us to move quickly. More than 800 million people around seminars on renewable energy. the world live below the poverty line and the number of school-age children who are not enrolled in school u Recently joined the "Renewable Energy Policy Network worldwide stands at 57 million. About 2 billion people for the 21st Century", which is an organisation pursuing lack access to potable water, electricity and sanitation. knowledge exchange in the renewable energy sector and Technological and knowledge development is increasing the development of relevant policies. The organisation the gap between North and South countries. The amount includes in its membership a number of international, of money needed by developing countries to finance academic and private sector institutions. infrastructure projects surged from billions to trillions. As such, continuing to address these and other issues with u Financing PPP projects in the area of renewable energy the same business model will never yield different results. to encourage the private sector to enter this field. Today, we find ourselves faced with only two options: u Encouraging MCs to increase the renewable energy either fragility or prosperity. If MCs continue to rely on share within their energy mixes. government expenditure and the export of raw materials without improving regulatory frameworks, enhancing The challenges, albeit immense, can be transformed transparency, building capacity, improving governance, into profitable opportunities in the MC market that integrating women and youth into development, boasts a population of 1.7 billion and a value of more strengthening the role of the private sector and improving than US$ 7 trillion, with expectations of a population management efficiency, the inevitable result will be higher increase to 2.2 billion by 2030. There is a fierce race in unemployment, worsening poverty percentages, illegal the technology and innovation area towards reducing the immigration and economic fragility. The second option costs of renewable energy and enhancing its efficiency. represents a prosperous future, and this is the main In that context, IsDB established the US$ 500 million goal of IsDB's new business model, which views IsDB Transform Fund to stimulate innovation in a number as a partner of MCs, not a mere financier for them. The of areas, including renewable energy, smart cities relationship between the two sides is a long-term one, and the environment. The fund has already financed ultimately aimed at empowerment and sustained, more several projects. On the other hand, IsDB is working on inclusive growth.
[ 25 ] DOING BUSINESS DIFFERENTLY
[ 26 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
Introduction Our MCs face complex and multidimensional challenge; therefore, they require comprehensive value-added services beyond financing . The IsDB Group aspires to become the institution of choice for project structuring and financing in MCs and a trusted adviser in the design of comprehensive development programmes .
As part of the process of aligning its operations to this new business model, IsDB is mainstreaming three development goals, six operational result areas and six performance drivers, as well as crowding-in contributions from partners to increase the magnitude, targeting and depth of impact on the ground . The fundamental principle is to co-create, along with our partners, tailored comprehensive solutions that tackle the root causes, not just the symptoms, in response to development needs raised by the beneficiaries themselves .
[ 27 ] Building the infrastructure
[ 28 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
[ 29 ] SDGs
Agriculture and rural development
he Agriculture and Rural Development Sector Policy provides strategic direction for investment Tby IsDB in the agricultural and rural development of its MCs
X Through its Agriculture and Rural PURPOSE The policy supports Development Sector Policy, IsDB supports X Many issues present significant projects and its MCs in their efforts to improve food challenges for agriculture-based MCs programmes that security through rural and agricultural (those engaged in production of crops, development for rural economic growth livestock and poultry; apiculture; or adopt an integrated and employment generation. It does so by: fisheries and aquaculture), where the sector approach to – Commercialising smallholder agriculture is the main contributor to the economy. – Developing agriculture value chains These include: agriculture and – Putting emphasis on private-sector – Persistent extreme poverty participation. – Malnutrition and hunger rural development – Low agricultural productivity and through improved X IsDB’s 10-Year Strategy (10YS) identifies an inability to meet increasing food inclusiveness, connectivity and growth demand, particularly in sub-Saharan access to in the Islamic finance system as the Africa basic services, main strategic corporate development – Poor market access objectives. The policy takes into account – Increasing food waste and food loss infrastructure these objectives, targeting sustainable, – Low levels of agricultural technology and economic resilient and equitable agriculture and rural and limited rural infrastructure, such development through the creation of viable as access roads, storage facilities and opportunities and profitable agriculture value chains and reliable energy supply, especially in promotion of innovative Islamic finance. South Asia and sub-Saharan Africa – Inadequate institutional and policy X To achieve its objectives, the policy coordination. focuses on: – Alleviating poverty and enhancing food security – Enhancing public-private partnerships towards the overall aim of sustainable, inclusive and equitable agriculture and rural development – Creating rural employment opportunities in agriculture, mainly among women and youth, and the rural non-farming economy.
METHOD X The policy: – Applies to all IsDB-financed projects, programmes and initiatives in the sector, providing a platform for synergies within IsDB to bring about the desired development impact while maximising efficiency – Enables IsDB to forge purposeful partnerships with development
[ 30 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
POTENTIAL IMPACTS INVESTMENT X The policy pillars that define the u- The policy aims to provide intended achievements are as follows: strategic direction for investment – Build resilient and climate- by IsDB in the agricultural and rural smart agriculture — Encouraging development of its MCs. climate-smart agriculture that builds resilience and enhances X It also aims to strengthen the agricultural productivity, devoting resilience of MCs food systems and special attention to resilience in value chains in order to reduce the fragile high-risk and low-capacity impacts of climate change events countries and/or enhance their ability to – Improve access to remunerative withstand or bounce back fast from markets — Improving market such events partners, including MDBs, civil infrastructure and supporting society organisations and the strong farmer–buyer links that X It outlines a framework for IsDB private sector. facilitate the commercialisation of Group support to MCs to improve subsistence agriculture, closing food security through rural and X The guiding principles of the the gap between women and men agricultural development for rural policy are as follows: in productive and social roles in economic growth and employment – Synergy and complementarity supply chains generation. — The preference will be to lend – Promote inclusive, sustainable to integrated projects that have and integrated approaches — X At its heart is the complementary components Taking an integrated approach to commercialisation of smallholder to address the socioeconomic agriculture and rural development agriculture through the development needs of rural communities through improved access to of agriculture value chains, with – A value-chain approach and basic services, infrastructure and an emphasis on private-sector private-sector participation economic opportunities participation. — IsDB financing will support – Promote access to Islamic projects and programmes that financial products and services X Through this policy, IsDB aims use the value-chain approach — Encouraging the development to improve investment in agriculture (the input–output market model), of Islamic microfinance products that generates sustainable growth encouraging the private sector that cater for the needs of among rural communities and to play a critical role in ensuring smallholders and small-to- to deepen Islamic rural financial sustainable development medium-sized enterprises (SMEs) intermediation. by promoting research and in rural development; fostering a technology dissemination and conducive legal and regulatory adoption environment for the use of – Science, technology and Shariah-compliant products innovation — IsDB will promote – Promote private-sector projects and programmes with participation — Supporting MCs AGRICULTURE AND RURAL innovative research-based in attracting foreign investment DEVELOPMENT development models or the to generate broad-based growth potential for technology transfer. and to increase the number The policy focuses on South-South Cooperation and of higher quality jobs in rural Reverse Linkage may also play a areas, encouraging foreign direct alleviating poverty and role investment in agriculture – Regional differentiation — This – Build human and institutional enhancing food security, reflects the diversity of challenges capacity — Collaborating with and priorities across the 57 MCs leading partners and specialised enhancing public-private and the variety in their resource agencies and through internal partnerships and creating endowments, socioeconomic mechanisms to support capacity setups and development stages. building, technical vocational rural employment Special consideration will be given education and training in to the most vulnerable regions. agriculture.
[ 31 ] SDGs
Water Sector Policy
hrough its new Water Sector Policy, IsDB is committed to ensuring resilient Tand sustainable access to water and sanitation for all
X IsDB has had a long engagement in the PURPOSE The policy will water sector in its MCs. However, all IsDB’s X Despite global resolutions recognising help improve the interventions in the sector to date have the human right to water and sanitation, design of water- been demand driven, fragmented and not almost one-third of the world population, framed by a clearly articulated policy. or 2.1 billion people, lack access to safely related projects and managed drinking water services, and 4.5 programmes within X In this regard, IsDB has adopted billion people (58%) still lack access to its Water Sector Policy (WSP) which safely managed sanitation services. MCs while ensuring provides a common framework for its operations in the water and sanitation X Many MCs are vulnerable to water efficient and sector. It establishes the basis for policy challenges such as poor endowment effective delivery by engagement and co-development of of natural resources, high exposure to projects and programmes with MCs. climate change impacts, poor water and IsDB The policy also offers the means to sanitation services and governance, and communicate and collaborate with other low agricultural water efficiency and sectors within IsDB and with partners productivity. having a similar mandate, particularly international financial institutions, multilateral organisations, service providers and think-tanks. In doing so, IsDB will attempt to assist its MCs in securing resilient and sustainable access to water for: – Agriculture – Industry – Municipal use – Environment.
X The policy is based on the guiding principles of 10YS for enhancing IsDB’s effectiveness and efficiency and the P5P. It also takes into consideration the global development agenda presented in the SDGs. Consultations with selected MCs and development partners were conducted to ensure relevance to MCs’ needs and coherence with the global agenda.
METHOD X The WSP takes into account IsDB’s previous interventions in the water sector and the lessons learned while implementing those operations. It also provides an overview of the sector challenges in MCs. Its overarching vision is
[ 32 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
INVESTMENT X By leveraging additional financial resources from other partners, including the private sector, IsDB would strive to meet the tremendous needs of its MCs in the water sector, especially as the majority of MCs require subsidised, if not grant, funding.
X Hence, the main objectives of the policy are to provide a conceptual framework for IsDB operations in the water and sanitation sector, while establishing the basis for policy engagement and co-development of projects and programmes with MCs.
‘resilient and sustainable water and X A McKinsey Global Institute report POTENTIAL IMPACTS sanitation systems for all’. estimated in 2017 that an annual X The policy aims to achieve the investment of US$ 500 billion in water X It is governed by two high-level following results: infrastructure is required from 2017 objectives: – Universal and affordable access through to 2035, representing an – Sustainability of water as a to water and sanitation — With aggregate spending of US$ 9.1 trillion.1 resource and of the related emphasis on quantity, quality infrastructure to achieve lasting and affordability, and giving X In order to cover part of these results due consideration to gender financial needs, IsDB will need – Resilience of systems and their dimensions and to vulnerable to mobilise additional resources, ability to recover from shocks populations in fragile and conflict- through partnerships with other (whether induced naturally as a stricken regions donors, and also tap non-traditional result of climate change effects – Water use efficiency — funding sources, such as institutional or disasters, or man-made in the Addressing agricultural water investors, corporations and context of fragility and conflicts). withdrawals in MCs (which philanthropies, to back investment exceed the world average) as well projects. Blended finance will play X In order to formulate the specific as technical and non-technical an important role in mobilising programmes and operations in the losses additional finance. water sector, four guiding principles – Capacity development and will be used in close cooperation with solutions transfer — Empowering MCs to help achieve the overarching stakeholders in order to close HUMAN RIGHT TO WATER AND objectives of the WSP: capacity gaps SANITATION – Finance/Strategic blending of – Effective water resources finance management — Enhancing water Almost one-third of – Synergy resources by making effective – Selectivity use of all various resources, the world's population lacks – Science, technology and innovation. including landscape restoration, access to safely managed nature-based solutions or flood X The expected impacts of the waters drinking water services, and policy for MCs include: – Resilient water systems — – Increased water security Tackling climate change impacts, 4.5 billion people lack – Enhanced human capital to addressing flood risks and manage the water sector helping build the capacity of access to safely managed – Greater sustainability of the water systems to withstand, water and sanitation projects and adapt to, and recover from sanitation services programmes. extreme events.
1. Bridging Infrastructure Gaps: has the world made progress? MGI (2017). https://goo.gl/Ly9oo8], based on a ‘business as usual’ scenario
[ 33 ] SDGs
Education Sector Policy
sDB’s Education Sector Policy highlights IsDB’s approach for the sector and guides all its I education programmes and investment priorities
X Despite major investments, the PURPOSE The policy defines performance of MCs in education over the X Although more children worldwide what IsDB stands period spanning 2000 to 2016 was mixed, are now completing school than ever for in education with many of them performing poorly in before, many education systems continue reaching the targets set for the United to struggle with inadequate financing, and clarifies what Nations Millennium Development Goals. shortages of qualified teachers, poor beneficiaries can learning environments, inadequate METHOD learning outcomes and outdated curricula. expect to receive Household poverty, rural disadvantage, X IsDB’s Education Sector Policy low levels of parental education, child from IsDB in terms provides support for building national undernutrition and a lack of early childhood of priority support human capital to strengthen the long- support further hamper access to learning. term global competitiveness of MCs by for education enhancing systems for education and X In the past, IsDB investments in the skills development. It also considers how sector were ad hoc and skewed in favour of the education sector in MCs can help in its middle-income MCs, as well as towards achieving the SDGs. tertiary education and the infrastructure and hardware components of education. X The policy highlights the guiding This was due to financing instruments and principles, strategies, implementation lending criteria, rather than the changing tools, financing modalities and other needs of MCs. considerations that IsDB will use to support education in MCs and in Muslim communities elsewhere. The overarching objective of the policy is learning for human development.
X Overall, the policy is guided by the Islamic teaching that seeking knowledge is mandatory for everybody, and the injunction that all children be accorded the right to live and thrive to their fullest potential.
X The common thread binding IsDB to its MCs is a shared commitment and adherence to Islamic principles for investments and interventions in education. The Education Sector Policy builds on this, to guide support for education premised on the first imperative of learning for human development. It also highlights education priority areas in which IsDB and its development partners will support MCs.
X The policy recognises that MCs are at
[ 34 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
INVESTMENT IsDB has been a major contributor to education in its MCs, with investments of over US$ 3.8 billion, second only to the total amount invested in these countries by the World Bank Group.
X In future, IsDB will pursue three levels of investment to address learning for human development: – Imperative investments, which involve areas for which IsDB will take responsibility and be accountable. These are projects and programmes for learning that build the fundamentals of human development. They constitute a niche area that defines what IsDB stands for in education diverse stages of development and – Desirable investments, which POTENTIAL IMPACTS varying degrees of achievement of are interventions that IsDB will education-related SDGs and that X The policy enables the collaborate in, or support, for IsDB interventions will therefore take achievement of IsDB’s goals for the the enhancement of human an integrated and holistic approach sector through the following three development based on analysis and dialogue with policy pillars: – Laudable investments, which are each MC. – Enhanced provision of basic important activities that IsDB will education — Encompassing advocate, or provide advisory X The principles on which the policy interventions in early childhood services to, without investing is founded are as follows: care and development, primary major financial resources. – Build foundations for human education, and literacy and non- development — Expanding basic formal education; supporting education provision to cater investments, including for out-of-school and refugee microfinancing, in non-formal children, rebuilding school education that targets functional systems in conflict-affected and and vocational literacy EDUCATION SECTOR POLICY fragile states – Post-basic education provision – Enhance human development — — Including support to upper The policy is guided by the Investing in centres of excellence secondary education, technical in universities and technical and and vocational education and vocational education and training training, and tertiary/higher Islamic teaching institutes, and in innovative education; helping to expand that seeking knowledge is science and technology initiatives and diversify upper secondary – Cultivate value-added education mandatory for everybody, and partnerships — Strengthening – Advocacy and advisory services IsDB’s involvement with the global — Encouraging the enrolment the injunction that all children community in order to play a of disadvantaged children into more prominent role in the aid early childhood education be accorded the right to live architecture for education programmes; ensuring equitable – Optimise education financing access to resource allocations; and thrive to their fullest — Using an innovative basket of including parallel provisions for flexible options to help minimise education (formal and Islamic); potential MCs’ financial dependency on promoting youth empowerment; donor resources. and ensuring gender equity.
[ 35 ] SDGs
Health Sector Policy
he policy is centred on the theme “Affordable Quality Health Services for THuman Development” . SDG 3 and related targets. Indeed, the PURPOSE The policy considers technical study, which was conducted as u The Health Sector Policy focuses on how IsDB's goals part of MCs’ health situation assessment, improving the health status, financial for the sector concluded to the following main findings: protection and responsiveness to citizen – Maternal and child health, satisfaction with the health system while can be achieved, communicable diseases and nutrition promoting equity. with particular deficiencies constitute incomplete agenda items for middle- and low- focus on equity, income MCs METHOD – The primary care sector is a common X The context of the health policy is partnership, R&D, priority for all MCs and for all disease to provide direction for IsDB to support sustainability, and groups strengthening the health systems within – Financial risk protection in middle- MCs, especially as many low-income regional and country and low-income MCs constitutes a countries and lower-middle income differentiation significant challenge to UHC objectives countries are not yet on course to achieve – IsDB’s health investments favour hospitals, often tertiary care, with large components devoted to construction and equipment, especially in Asia and MENA regions – Projects lack components that assure the sustainability of activities after their termination – Current evaluation methods are not rigorous enough to provide robust evidence of effective impacts on health performance indicators – IsDB has limited health expertise and funding mechanisms, without which expertise it is less likely to design, assess and support the implementation of more effective projects – The level of concessionary funding, at just 6% of total funding, limits the extent of IsDB’s engagement with low-income countries.
X The Health Sector Policy is articulated on the following six pillars, which promote SDG 3 and the related targets and contribute to their realisation in MCs: – Target vulnerable and poor populations — Projects and programmes under IsDB's innovative financing mechanisms should prioritise low-income and lower-middle-income countries, but also vulnerable and poor populations in
[ 36 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
upper-middle-income countries – Equity (leaving no one behind) components, including the Islamic and high-income countries. by reversing the prevalent Solidarity Fund for Development – Prioritise the strengthening of suboptimal status of key (ISFD), a US$ 10 billion fund with soft primary health care delivery health outcomes of the target loans and grants similar to the World and prevention, with limited and populations in their various Bank’s IDA. exceptional support for tertiary niches care and specialised hospitals — – Partnership and improved X It has successfully mobilised In order to address the increasing collaboration among IsDB through the Lives & Livelihoods Fund burden of diseases in a cost- Group entities to ensure internal US$ 559 million for health sector effective manner, IsDB should coherence of operations, and projects. devote major portions of funding collaboration with stakeholders towards primary health care and at national, regional and X Collaboration with the disease prevention international levels International Federation of Red Cross – Support national health – Research and development to and Red Crescent Societies has financing initiatives to achieve meet health demand by providing generated a US$ 100 million bond UHC — This can be addressed by the required expertise and for cholera control in 29 countries. providing technical assistance to innovation within MCs to source IsDB is also engaging in collaborative help design alternative national inputs and services and scaling ventures to fund the Vaccine health financing, through new up proven effective interventions Alliance. In addition, the health sector 'pooling' mechanisms such as – Sustainable solutions to promote has benefited from 20% of the US$ social health insurance, national growth and national ownership 700 million disbursements made health insurance and equity funds for the Global South, GVC analysis so far under the King Abdullah bin – Innovate financing for health in the health sector and mapping Abdulaziz Programme for Charity projects and programmes — of actors and stakeholders to Works, an innovative financing Engagement in innovative health increase competitiveness and initiative managed by IsDB. finance will evolve from an ad-hoc potential markets in MCs health to a more systematic approach sector focusing on blended financing, – Regional and country buy-down loans, new Islamic differentiation to ensure the financing models and public- appropriateness of health private partnerships interventions with the political, – Achieve impact of investment economic, social and cultural through support for other context of the country or region sectors and thematic policies of the project. — The policy promotes collaborations with the other INVESTMENT sectors to achieve “Health-in- All-Policies”, as well as a health X IsDB has a long history of HEALTH SECTOR POLICY global value-chain approach providing projects in the health – Improve IsDB governance and sector and its investments in this The policy has evaluated capacity building in the health sector have trebled in the period sector — Technical expertise, 2010–2016 over 2003–2009. The MCs' status relative to governance, and accountability projects span different areas of mechanisms need to be work and MCs within all regions and internationally recognised developed in health project design income groups. and implementation, and the standards, serving as a basis X projects should live beyond the IsDB Group has approved for ensuring the alignment period of IsDB financing. a US$ 2.3 billion COVID-19 ‘Strategic Preparedness and of IsDB's agenda with SDG 3 Response Programme’ (SPRP) as a POTENTIAL IMPACTS comprehensive integrated response targets, and optimising funding X The policy considers how IsDB’s package. goals for the sector can be achieved, allocations with particular focus on the following X IsDB also has special funds priorities: with concessionary and soft loan
[ 37 ] SDGs
Energy Sector Policy
he Energy Sector Policy establishes the overall directions guiding IsDB’s future energy operations in TMCs in line with IsDB vision and strategies and the SDGs, especially SDG 7 related to ensuring access to affordable, reliable, sustainable and modern energy for all
key enablers (private sector development, PURPOSE IsDB will expand innovative financing, building partnership X IsDB’s support for sustainable energy its support for and regional integration). The policy development in its MCs is based on private-sector emphasises building partnerships and the significant financing gap identified innovative financing mechanisms for scaling under the framework of the SDGs. IsDB’s energy projects up the future financing for the sector. Energy Sector Policy aligns future energy and public-private operations with the changing needs of METHOD MCs and the global priorities for energy set partnerships, taking by the SDGs, IsDB’s 10YS and the reform X Sustainable energy development of agenda based on the P5P. into account country MCs requires sound economic, social and circumstances and environmental policies, where rational use X Operational actions and strategies in the of energy and exploitation of indigenous sector are built on four main pillars (increase the need for prudent renewable resources offer a large untapped access to energy, scale up renewable management of risks potential across IsDB constituency to energy, increase energy efficiency and reduce the rising energy inequality. improve knowledge services) and four Energy Sector Policy has four main pillars: – Increase access to modern energy services — In line with UN efforts to provide universal and affordable access to sustainable modern energy services by 2030 (SDG 7), IsDB will look for ways to scale up its support to provide access to electricity – Scale up renewable energy — IsDB intends to play a catalytic role in promoting renewables, in particular solar and wind energy, as part of its goal of sustainable energy development and as an alternative to fossil fuels – Enhance energy efficiency — IsDB will assist all MCs in evaluating best practices in energy management and tailoring these practices to their unique characteristics. Through well-designed and targeted energy efficiency (EE) improvement projects, IsDB will assist all MCs in putting their energy sectors along a less energy intensive path – Improve knowledge services — IsDB will focus on carefully selected activities to establish itself as a recognised partner for providing/utilizing high- quality knowledge to MCs
[ 38 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
X The pillars are aligned with the regional integration of energy (PPPs), taking into account country core targets of SDG 7 as follows: systems, and in areas such as circumstances and the need for – Target 7.1 — By 2030, ensure solar energy. As a South-South prudent management of risks. IsDB universal access to affordable, institution, IsDB is in a unique will also assist MCs to strengthen reliable and modern energy position to extend regional their policy framework and services cooperation between MCs institutional capacity for PPPs in – Target 7.2 — By 2030, increase – Building partnership — IsDB energy projects. substantially the share of supports building stronger renewable energy in the global partnerships with other X IsDB will identify opportunities for energy mix multilateral and bilateral developing effective and innovative – Target 7.3 — By 2030, double the development institutions cooperation models for developing global rate of improvement in EE. during the implementation of innovative financing with partner the policy while preserving its development institutions. comparative advantage as one of POTENTIAL IMPACTS the major South-South financing X There are four main enablers institutions. ALIGNING POLICY WITH SDG 7 of the policy that will facilitate the success of energy projects in MCs: The policy pillars are aligned INVESTMENT – Private sector development — IsDB acknowledges the pressing X The 10YS and P5P call for with the SDG 7 targets to need to support the private sector greater selectivity in determining to boost economic growth in future financing operations, taking ensure universal access MCs, and facilitates the private into account country needs and sector intervention in the sector sustainability criteria adopted by to affordable, reliable and – Innovative financing — The focus MDBs and other development modern energy services, on energy efficiency/renewable partners. In the energy sector, this energy/climate change will require selectivity will ensure the relevance increase the share of a major increase in concessional of future operations for addressing or soft term financing, even priority development challenges, renewable energy and in middle-income countries. taking into account changing MC IsDB will identify opportunities circumstances and needs. double the global rate of for developing effective and innovative financing mechanisms X IsDB will expand its support improvement in EE by 2030 – Regional energy integration — for private sector energy projects IsDB is promoting and facilitating and public-private partnerships
[ 39 ] SDGs
Transport Sector Policy
sDB's Transport Sector Policy establishes the overall direction for lsDB's transport Ioperations in MCs
PURPOSE IsDB will assist METHOD X The Transport Sector Policy aims to MCs to selectively X The Transport Sector Policy is guided by address the significant financing gap introduce new and two objectives, five pillars, six cross-cutting identified within the framework of the enablers and three guiding principles. sector-related SDGs. innovative types of transport operations X The five pillars identify the main types X It outlines the principles and intentions of transport interventions IsDB will finance. that permit, guide and govern IsDB’s to address Two of these cover the provision of basic transport sector operations to achieve its access and connectivity to assist the institutional goals for the sector, which can changing needs and neediest populations: be summarised in its vision for ‘Sustainable improve transport – Supporting universal, affordable access Transport for Inclusion and Prosperity’. in poor and disadvantaged countries, sustainability and parts of countries X Within IsDB’s decentralised framework, – Supporting post-disaster and -conflict the policy will facilitate a more intensive reconstruction in the transport sector. engagement with MCs through the Regional Hubs to discuss policy and X The other three policy pillars strategy, and inform investment choices enhance the contribution of transport to and other support for MCs. competitiveness, trade and economic growth and help MCs appropriately transition to clean and low-carbon types of transport: – Through its support for efficient transport systems, IsDB will finance investments to improve the efficiency and competitiveness of high-volume transport systems with a view to optimising the use of resources and enabling economic growth – IsDB will finance high-volume regional transport corridors and streamlining of border crossing procedures and logistics arrangements, thereby contributing to regional connectivity and trade growth – Green transport will assist middle- and high-income MCs that wish to reshape their transport systems to reduce adverse environmental impacts such as urban congestion, air pollution, noise pollution and CO2 emissions.
X The policy has six cross-cutting enablers to be considered when preparing all transport operations. These address
[ 40 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
sustainability of road operations in some MCs – Demand for greater efficiency from middle- and high-income MCs – Continued weakness in project preparation and administration that could eventually lead to overall portfolio risks.
X The main solution to these threats will be to increase project selectivity and improve project quality and value addition. issues that are important for both At sector level, it will consider project sustainability and achieving providing capacity development INVESTMENT the transport-related SDGs: support to address sector-wide – Traffic safety — All road projects issues and needs. X IsDB’s average financing amount will include road safety audit at for transport projects has risen the feasibility study, engineering steadily in recent years, from around POTENTIAL IMPACTS design and engineering US$ 43 million in 2012 to US$ 158 supervision stages X Through the policy, IsDB seeks to million in 2016 and 2017. This – Inclusion and social realise seven new opportunities: increase has helped IsDB to scale sustainability — During project – Establishing public-private up its support more appropriately preparation, IsDB will examine partnership operations in MCs in relation to country needs and to options for serving the needs that have a conducive policy/ make more efficient use of staff of different groups of potential legal framework, capacity and time. users, taking into account youth governance arrangements and gender dimensions and the – Expanding IsDB’s role in regional X During the period 2012–2017, needs of poor, disadvantaged and cooperation in transport IsDB transport allocations saw an vulnerable groups – Co-financing with private Islamic average of 12 transport projects – Asset sustainability — To finance institutions approved each year for a total of address the problem of – Establishing project preparation US$ 1.1 billion. inadequate maintenance, all financing facilities to supplement road projects will consider the resources available for project X Across all regions, 72% of the adequacy of MC asset preparation and engineering financing was for roads and 14% for management systems design railways, with smaller amounts for – Environmental sustainability – Introducing innovative forms ports, airports and urban transport. — IsDB will apply environment- of Islamic finance for transport friendly approaches to the design projects, including for multi- of transport projects. Upon request tranche financing TRANSPORT SECTOR from MCs, it will provide support – Establishing knowledge ALLOCATIONS for preparation and implementation partnerships to supplement staff of environmental safeguards knowledge and expertise During the period 2012–2017, – Climate change — IsDB will – Extending transport capacity introduce the screening of all development support for MCs an average of 12 transport projects for climate risks early including through Reverse in project preparation, and will Linkages. projects were approved incorporate climate-resilient design where significant risks are X The policy will also allow IsDB to each year for a total of identified mitigate four emerging threats: – Capacity development — At – Increasing competition from other project level, IsDB will increase its MDBs and emerging financiers US$ 1.1 billion support for strengthening MCs’ – Inadequate road maintenance project implementation capacity. and road safety threatening the
[ 41 ] SDGs
Urban Sector Policy
he need to have an up-to-date Urban Sector Policy that provides a proactive vision, strategic framework, T engagement tools, services and financial products is vital to both IsDB and its MCs . These objectives are promoted internationally by Sustainable Development Goal 11 (SDG 11) and the commitment to work towards “leaving no one behind”
X Low income and lower-middle income PURPOSE Well-planned countries are now the locus of the most X The Urban Sector Policy (USP) and managed rapid urban growth. In 2018, cities in is intended to guide all IsDB urban urbanisation can those countries hosted 32% and 41% programmes and operations, focusing of the population respectively. By 2050, on the overarching goal of achieving be a powerful tool both country groupings will cross the a sustainable and inclusive urban for sustainable 50% threshold with 50% and 59% of development in MCs. their populations living in urban areas development for respectively (United Nations 2019). X The scale and rapidness of urbanization cannot be underestimated amid the both developing and METHOD challenges it poses for developing developed countries countries, both positive (if it is well- X IsDB has introduced the USP in line with managed) and negative (if countries do not the main recommendations of the New have the policies and institutions capable Urban Agenda which was adopted at the to manage it). Habitat III Conference in 2016 in Quito and represents a shared vision for a better and more sustainable future.
X The policy is designed to fulfil three key functions: (i) provide a framework for developing programmes and projects with MCs that promote sustainable and inclusive urban development; (ii) offer a coordinating framework that harmonizes relevant IsDB sectoral and thematic policies at the policy level and builds synergies with other sectoral operational engagements; and (iii) align the USP with other corporate policies, particularly the P5P and the 10YS. It also offers a basis on which to exchange views and mobilize partnerships in promoting sustainable and inclusive urban development with other multilateral development banks, international organizations, civil society organizations and the private sector.
X The policy is underpinned by five pillars, each contributing to achieving sustainable and inclusive urban development in different ways. These pillars are as follows: – Urban economy – Urban mobility
[ 42 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
programmes are often thought of as the "integrators" of different sectors in a common space.
X Therefore, an urban policy can have impact on the seventeen SDGs, in one way or another. IsDB's Urban Sector Policy is expected to impact mostly four SDGs, namely: SDG 11 (Sustainable Cities and Communities); SDG 6 (Clean Water and Sanitation); SDG 7 (Affordable Clean Energy); and SDG 13 (Climate Action).
INVESTMENT X From its inception to January 2021, IsDB has provided a net financing of US$ 7.6 billion to the urban sector in spite of the fact that a dedicated urban policy was not yet in place.
X In the housing sub-sector projects, two key projects have been successfully completed in Bamako, Mali (Basic Social Housing Project and Support to the Social Housing Program, US$ 31 million) and in Saida, Lebanon (the Saida City Infrastructure Development Project, US$ 21 million). However, the biggest completed urban projects were in urban water supply (Bahrain US$ 191 million, Algeria US$ 63 million, Lebanon US$ 58 million, etc.) and sanitation sector (Iran, Turkey, – Urban housing and slum – Capacity building and knowledge Turkmenistan, Uzbekistan, etc.). upgrading sharing – Urban water and sanitation – Financing mechanisms, including – Disaster, climate and PPPs environmental resilience. – Women and youth empowerment. FINANCING THE URBAN SECTOR
X It is driven by seven enablers: POTENTIAL IMPACTS From its inception to January (1) urban governance; (2) national urban policy; (3) urban planning; X Given that any topic of national 2021, IsDB has provided a (4) municipal finance; (5) citizen interest (e.g. health, education, engagement; (6) building climate change, social cohesion) net financing of partnerships; and (7) STI & ITC affects urban space — that is, issues applications. or forces that either impact cities or are impacted by them — there is a US$ 7.6 billion X In terms of guidance, it is oriented virtually limitless scope that can be to the urban sector by four guiding principles: ascribed to urban policy. Because of – Country-focused selectivity this somewhat unique feature, urban
[ 43 ] SDGs
IsDB-APICORP Economic Infrastructure Facility
sDB and the Arab Petroleum Investments Corporation (APICORP) signed a Memorandum of IUnderstanding for the establishment of a new Economic Infrastructure Facility aimed to address the significant water, energy and waste management challenges facing their shared MCs
X IsDB and APICORP signed a PURPOSE The IsDB / Memorandum of Understanding (MoU) X SDG 9 commits countries to ‘Build APICORP US$ 1 in September 2019 at the World Energy resilient infrastructure, promote inclusive billion Economic Forum in Abu Dhabi. As a first deliverable and sustainable industrialisation and foster of the MoU, IsDB and APICORP plan to innovation’. Together with SDG 6 (clean Infrastructure Facility establish a private sector-focused US$ 1 water and sanitation) and SDG 7 (affordable will finance energy, billion Economic Infrastructure Facility (EIF) and clean energy), this Goal has the power to finance energy, water and waste value to change lives for the better in all countries water and waste chain. The cooperation will: that can take decisive action in these areas. value-chain initiatives – Address the lack of private sector engagement in infrastructure finance by X A wide-ranging partnership between in 11 MCs of the promoting the use of PPPs in IsDB MCs IsDB and APICORP will harness the Organization of Arab as an alternative finance solution to ambition of these goals to help progress Petroleum Exporting public debt energy, water and waste value-chain – Support the human and economic projects in their common MCs. Countries (OAPEC) development of MCs by addressing the need for power and water infrastructure, for which the investment gap is estimated at US$ 200 billion across MCs – Align financing with IsDB’s Global Value Chain (GVC) approach since the industrialisation strategy of MCs is directly linked to internal water supply and power generation capacity.
METHOD X The EIF will take the form of a partnership between IsDB and APICORP to identify, negotiate, conclude and jointly execute mandates to arrange structured finance facilities for the sustainable development of the economic infrastructure of their common member states, especially with a focus on power and water. – Combining financial support — IsDB and APICORP will jointly finance the eligible infrastructure projects. – Mutualising resource mobilisation efforts — IsDB and APICORP will jointly mobilise additional financial resources from the syndication market to scale up the initial contribution
[ 44 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
– Leveraging synergies — between the respective MCs of – Geographical coverage — All Complementary skills-set and IsDB and APICORP. IsDB MCs are in scope, with market knowledge will enable priority given to the 11 OAPEC IsDB and APICORP to enhance MCs that are common to IsDB INVESTMENT their respective origination, and APICORP. The EIF will also execution and distribution – Target size — The intention is to finance projects in non-OAPEC capacity. jointly arrange financing for an MCs if the projects are sponsored aggregate amount of US$ 1 billion by a company headquartered in within a three-year period. an OAPEC MC. ACHIEVEMENTS – IsDB’s resource mobilisation — X The EIF will enable IsDB to: Four-times resource mobilisation – Complete more projects — target for IsDB with US$ 250 DEVELOPMENT PROJECT Thanks to a significant scaling million contribution coming COMPLETION RATE up of IsDB’s contribution to from IsDB, US$ 250 million from private sector-focused economic APICORP and the rest mobilised The EIF will enable IsDB to infrastructure financing from external sources of funding, – Leverage specialised knowledge including commercial banks and complete more projects — Bringing benefits from development finance institutions APICORP’s expertise in the – Sector and project — The EIF thanks to a 4x scaling up of energy sector and building PPP will focus on the energy GVC by lead arranger capacity within financing economic infrastructure IsDB's contribution to private IsDB with an emphasis on the power, – Share costs — Mutualising water and waste sectors. The sector-focused economic origination, financing and involvement of the private resource mobilisation efforts sector (local, regional and/ infrastructure financing – Reinforce regional integration or international) will also be a — Enhancing market connectivity priority.
[ 45 ] SDGs
Crowding-in market resources: first project of its kind in Kazakhstan
sDB is collaborating with other multilateral co-financiers to provide joint funding of US$ 585 million for a Iring road project in Kazakhstan, heralding the first public-private partnership in the country
X The project’s objective is the financing, PURPOSE The BAKAD Almaty construction and operation of 66 km of X The BAKAD Almaty Ring Road Project Ring Road Project tolled highway. is a major infrastructure initiative that is expected to serve will transform lives and businesses X By removing a major transport in Kazakhstan. Having recently won as a benchmark bottleneck in Almaty, the project will lead international recognition with the title of for international to a reduction in local air pollution and Europe Transport Deal of the Year at the greenhouse gas emissions. PFI Awards 2020, the project will help investors to exploit Almaty City in Kazakhstan to build a ring X It is the largest infrastructure project in road that will address the following needs: PPP models for Kazakhstan outside the oil and gas sector. – Reduction of travel times, traffic infrastructure congestion and traffic accidents in the X It is expected to move the economy city projects in the away from reliance on oil and gas by – Creation of a bypass for commercial region in the future encouraging new methods of investment vehicles following the ‘Western China — such as PPPs. Western Europe’ transnational highway, which is part of the Chinese ‘One Belt, X The ring road project will help One Road’ initiative Kazakhstan to achieve its stated – Advancing the integration of the city and aspiration to join the ranks of the 30 region into the Central Asian economies. most developed countries of the world by achieving OECD standards and improving its chances of achieving its targets for the SDGs.
METHOD X In response to the identified needs, IsDB worked with various co-financiers to provide funding for the BAKAD Investment and Operation Limited Liability Partnership to be set up as a project company to develop and operate a 66km ring road north of the city of Almaty.
X The funding is arranged on a PPP basis and this is the first PPP project to take place in Kazakhstan.
X IsDB’s Murabahah approach (also known as cost-plus) allows for the lender to inform the borrower of a fixed mark-up on repayments in place of an interest rate.
[ 46 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
19 viaducts and other elevated for Reconstruction and Development ACHIEVEMENTS structures. and the Eurasian Development Bank. X The signing of the financing documents took place at Nur Sultan, X The BAKAD project will create Kazakhstan in February 2020, with employment opportunities for the the financial close reached in August local population over several years. THE RING ROAD PROJECT 2020 despite the limitations caused by the ongoing COVID-19 pandemic. X The BAKAD ring road is the first Helping Kazakhstan to achieve infrastructure concession project X BAKAD has a 20-year concession to be executed at state level, both in its aspiration to join the ranks awarded by the Republic of Kazakhstan and in Central Asia. Kazakhstan to a joint consortium of of the 30 most developed Turkish and Korean companies for X The presence of international financing, construction, operation advisors and lawyers, and the open, countries of the world and maintenance of the project. international competitive process made this project a unique case, one INVESTMENT X The concession for the project of a kind for the entire region. was awarded to the project sponsors, Alsim Alarko and Makyol Insaat IsDB will provide a INVESTMENT from Turkey and SK Engineering and Construction (SK) and Korean X IsDB will provide a US$ 100 Expressway Corporation from Korea. million Shariah-compliant instalment US$ 100 million sale financing facility to support the Shariah-compliant Instalment X The ring road will have four lanes project. in the first and last sections, with a Sale financing facility to length of 9 km and six lanes in all X IsDB’s funding is part of a total other sections, with a total length financing package of US$ 585 million support the project of 57 km. It will include 21 bridges, co-financed by the European Bank
[ 47 ] SDGs
Enhancing MCs' Evaluation Capacity
n addition to its function as financier, IsDB is a knowledge bank, and its Operations Evaluation Department I(OED) has contributed to helping MCs strengthen their monitoring and evaluation systems and capacities at all levels to allow them to generate and use evaluative evidence for more effective policies
and Reinforcement components of the P5P, PURPOSE Through the demonstrably in IsDB’s activities in Bahrain, X Significant economic progress has capacity Kazakhstan, Morocco and Senegal. been made by many MCs over the past development of decades, enabling them to move towards METHOD achieving the SDGs. However, the public officials mechanisms for monitoring and evaluating from MCs in results X IsDB works diligently to identify the those interventions have not developed at need for capacity development in the the same pace, leaving the governments measurement, areas of monitoring, evaluation and impact lagging in terms of result measurement. assessment in MCs. In addition to the the OED helps supply-driven approach, OED responds in X Through the OED, IsDB has leveraged its implement several cases to the demands of MCs. expertise and experience in monitoring and evaluation (M&E) to help MCs improve their awareness, X In concert with partners such as M&E systems and result measurement competency, delivery the World Bank, capacity development capacities. programmes, including tailored workshops, and reinforcement case studies, simulations and M&E X Evaluation capacity development systems development support, are initiatives were undertaken with the aim to designed to suit the specific needs of MCs. develop: – A culture of evidence-based decision X Efforts to impart capacity development making in MCs initiatives often combine classroom – M&E systems within MCs training with practical evaluation – The evaluation capacity of public experience. For example, participants from institutions as well as evaluation the Court of Audit in Morocco had the professionals. opportunity to act as external members of the OED evaluation team. X These activities are aligned with the Awareness, Linkages, Competency, Delivery X In some cases, IsDB collaborated with government agencies to transform them into centres of excellence for capacity development in M&E, preparing the agency officials to train other officials to shift the country’s decision- and policy-making systems into evidence-based activities.
X The Court of Audit in Morocco and the Astana International Financial Centre in Kazakhstan are now equipped with the capacity to train other agencies, resulting in a cascading effect of capacity development initiatives.
X IsDB has joined the Global Evaluation Initiative, a broad and inclusive group of
[ 48 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
and evaluate project outcomes. 27 with the Independent Evaluation senior officials from the Ministry Group to bring a unique capacity of Finance and the executing building opportunity in impact agencies of line ministries evaluation to the officials participated in the workshop of selected MCs. Delivered – Evaluation capacity building completely in French, the training workshop for senior government programme was tailored to officials of Kazakhstan — With enable the participants to design support from Astana International and implement robust and high- Financial Centre of the Ministry quality impact evaluation of of Finance, IsDB delivered an development policies, strategies evaluation capacity building and projects. The training used workshop for 30 participants from six case studies from six MCs, different sectors and ministries, namely Burkina Faso, Cameroon, including Astana officials. The Guinea, Mali, Niger and Senegal, workshop was aimed at equipping to allow the participants to participants with technical skills relate their skills to their own in evaluation and their practical experiences. A total of 60 officials applications in development from the participating countries projects. Participants gained attended the workshop. All the six deeper understanding of countries are MCs of IsDB and the national governments, international evaluation methods and World Bank. and regional organisations, private techniques and their application sector organisations, academic to project management INVESTMENT institutions and civil society groups – Evaluation capacity that have formed a global partnership development programme for X To undertake these evaluation aiming at closing the M&E gap Moroccan Court of Audit — development capacity initiatives, and strengthening capacities at The Moroccan Court of Audit IsDB’s investment was around all levels in order to generate and has recently been mandated to US$ 77,000. The gains achieved use evaluative evidence for more evaluate public sector projects are very high for such a modest effective policies in MCs. and policies for the government of investment, given the impact on MCs Morocco. IsDB’s programme was capacity to monitor public strategies, meant to support the Moroccan policies and projects towards ACHIEVEMENTS Court of Audit in preparing 28 achieving the SDGs. X Through capacity development magistrates to become experts programmes in Bahrain, Kazakhstan, in the evaluation of government Morocco and Senegal, IsDB trained projects, strategies and policies OED CAPACITY BUILDING a total of 130 mid- and senior-level through classroom training INITIATIVES officials from nine MCs. and hands-on experience. The programme succeeded in X Interventions have been designed strengthening the institutional US$ 77,000 invested based on a deep understanding evaluation capacity of the Court of underlying issues and are thus of Audit through the development capacity development tailored to the local contexts of the of an evaluation manual, related 4 specific countries. tools and procedures and activities – Training in M&E for government guidance on four pilot evaluations officials of the Kingdom of conducted by the Court of Audit. Bahrain — Responding to the Systems were put in place to 130 Officials from 9 MCs desire of the government of the support evidence-based decision trained Kingdom of Bahrain to improve making, organisational learning results, IsDB delivered an and accountability intensive workshop to familiarise – Impact evaluation workshop for Partnership with 2 Global government officials with the officials of MCs in Senegal — theory of change and enhance Given the expertise of the World Initiatives their capacity to deliver, monitor Bank Group, IsDB teamed up
[ 49 ] SDGs
Unlocking finance to access energy through crowdfunding
crowdfunding pilot project is expected to connect more than 50,000 people with electricity A from off-grid solar systems
PURPOSE The TRINE METHOD X 789 million people still live without intervention is an X The agreement with TRINE was for electricity, 75% of which are in rural areas. innovative financing IsDB to provide financing for off-grid clean, sustainable energy solutions in MCs. The X Lack of sufficient financing to access tool that will build proposal also intends to enhance the electricity, especially in rural areas, is a key partnerships with availability of an Islamic finance structure challenge to achieve the goal of universal for off-grid solutions in MCs through access to electricity by 2030 (SDG 7.1.1). the private sector crowdfunding. SMEs face particular challenges in this regard due to the difficulty of obtaining in the development X In particular, TRINE’s mandate is to working capital. arena tackle the lack of access to capital for the off-grid solar energy sector. X Low-cost solar solutions are starting to bring new options to these communities. X Based on the belief that all people IsDB is working with the Swedish should have access to clean energy, TRINE crowdfunding platform, TRINE, which was supports SMEs specialising in distributing established in 2015 in response to these solar home systems (SHSs) to rural challenges. households through financing the purchase of these systems.
X SHSs are standalone photovoltaic systems that are ideal for remote communities that do not have access to the national grid.
X The technology costs to provide distributed renewables for energy access such as SHSs have reduced significantly in the three years up to the end of 2020, by more than 40%.
X IsDB recognises crowdfunding as a way of creating linkages and partnerships that offer resource mobilisation services for MCs.
X IsDB has chosen to work with TRINE on a project whose objectives are: – To attract and positively influence the decisions of crowd investors to support the platform’s campaigns – To enable communities in selected MCs to benefit from crowdfunding campaigns and access to low-emission energy.
[ 50 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
X The cooperation with TRINE various geographies and sectors: X Both IsDB and the crowdfunders allowed for the extension of Murabaha will earn a mark-up of +7% annually, financing to SMEs that provide X IsDB’s involvement in this with a maximum tenure of five years. clean electricity services to rural initiative will have a critical de-risking households and small businesses. role to attract more crowdfunded investments that could make a ISDB FINANCING FOR OFF-GRID X The initiative: tangible difference. CLEAN, SUSTAINABLE ENERGY – Provides a two-times multiplier SOLUTIONS IN MCs effect by leveraging IsDB’s € X IsDB is partnering with UNDP on 1 million contribution with the the TRINE initiative to assess the Provides a 2x multiplier contribution from the crowdfunders impacts of IsDB-financed campaigns – Creates the opportunity for IsDB using UNDP’s Climate Action Impact effect by leveraging IsDB’s to achieve real developmental Tool, to enable investors, both crowd impact by unlocking access to and institutional, to monitor the renewable energy in MCs impact of investments on achieving € 1 million – Allows a transfer of knowledge on the SDG targets. contribution with the crowdfunding by engaging with an external platform. INVESTMENT contribution from X TRINE’s sustainable business ACHIEVEMENTS crowdfunders model and its focus on solving acute X More than 50,000 people will developmental challenges made it receive electricity access during the eligible for IsDB approved financing TRINE pilot project. of € 1 million. EMISSIONS REDUCTION
X Emissions equivalent to 145,000 X The platform already has a Emissions equivalent to tons of CO2 will be avoided as a portfolio in excess of € 45 million direct result of replacing dangerous and has built up a successful track sources of fossil fuel. record through the pilot project. 145,000 tons of CO will be avoided X The successful outcome of this X Estimates show that each € 2 pilot project will inspire support for extended by IsDB will attract € 2–3 other crowdfunding platforms in from crowd investors.
[ 51 ] SDGs
Global Partnership for Education Alliance: enabling more and better financing
sDB is supporting universal basic education through partnership with the IGlobal Partnership for Education (GPE)
X Partnerships allow IsDB to actively PURPOSE IsDB is partnering participate in the global aid architecture X In 2019, IsDB and the GPE, the largest with the GPE discourse while leveraging resources for its entity in education financing, launched an to support the MCs. alliance to address the global education crisis. implementation X IsDB and participating development of the National partners will work together to leverage X The GPE is a US$ 2.8 billion global resources, with the aim of returning 28 fund, bringing key stakeholders together Education million children to school. to improve education in 68 of the world’s poorest countries, of which 35 are IsDB Development METHOD MCs. A major focus of the partnership Strategy of is addressing the high number of out- X The initiatives aim to bring about a of-school children and the poor levels of the Republic of paradigm shift from schooling to learning, learning achievement. Tajikistan whereby education systems can be reformed structurally and operationally X The main objective of this partnership is to facilitate a holistic and conducive to provide access to education for out- of- environment for teaching and learning. school children, with the slogan ‘Leaving no child out of school in IsDB MCs by 2030’. X By collaborating with partners, education investments are optimised for greater efficiency and impact. For instance, UNICEF is providing technical assistance to the project, while IsDB’s engagement with the GPE provides direct grant resources through the Education Sector Programme Implementation Grant or the Multiplier, which allows for leveraging of resources to crowd- in new and additional external financing.
X In order to access GPE financing, countries must allocate 20% of the national recurrent budget to education. This domestic resource requirement boosts the capacity of executing agencies or ministries of education to meet counterpart funding requirements, which are an important aspect of IsDB-funded sector projects.
X The new framework currently being piloted in Tajikistan engaged the Local Education Group (comprised of all donors, NGOs, civil society, and teachers’
[ 52 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
INVESTMENT X The total cost of the education pilot project in Tajikistan is US$ 46 million with IsDB’s contribution of US$ 30 million and a GPE grant of US$ 10 million, in addition to US$ 6 million from the Government of Tajikistan.
X To prepare the project, the GPE provided US$ 181,141 to IsDB as a project preparation grant facility.
X With access to the GPE country allocations, IsDB is able to build its pipeline of projects around these allocations. In this way, it can leverage and blend grant resources to soften IsDB ordinary financing, which lower-income MCs are reluctant or unable to absorb.
X Because the partnership is scalable, this has allowed IsDB to enter into consultation with the Regional Hub of Rabat, Morocco to explore the potential for support to Tunisia and Morocco to unlock their respective allocations from the GPE Multiplier of US$ 15 million each, following the successful pilot of the Tajikistan operation. unions) under the leadership of the assessment reforms Government, to ensure an inclusive – Training of teachers/mentors/ policy dialogue, synergy and mutual professionals GLOBAL PARTNERSHIP FOR accountability of stakeholders. – Development and printing of EDUCATION 250,000 sets of new teaching/ X The Local Education Group learning materials platform provided IsDB with the – Stocktaking of competency- US$ 2.8 billion opportunity to harmonise its based education activities. global fund to improve interventions within a sector-wide approach aligned with national policy X As part of this initiative, IsDB education in 68 of the and strategies. has been accredited as the second multilateral development bank to world’s poorest countries, of serve as Grant Agent for the GPE ACHIEVEMENTS (alongside the World Bank) with which 35 are IsDB MCs XThe outcomes of the partnership, fiduciary responsibility over the GPE whose target is to enhance access to resources. student-friendly education, include: TAJIKISTAN PILOT PROJECT – Construction of 68 schools of 752 X IsDB became an Alternate classrooms for 18,000 students Board Member for the Multilateral and five administrative buildings Development Agencies Constituency, 68 schools for in 18 districts and cities of the to enhance and deepen IsDB Khatlon Region and Dushanbe involvement in the governance of the 18,000 students – Curriculum roll-out and learning GPE.
[ 53 ] SDGs
THIQAH online initiatives
he IsDB Group Business Forum – THIQAH, together with IsDB Group’s private sector entities, Thas launched and implemented initiatives in more than 30 of IsDB’s MCs
PURPOSE These first-of-their- METHOD X IsDB has embarked on a series of kind initiatives aim X The three unique online initiatives have digital and virtual projects together with to provide innovative the following aims: three of the IsDB Group’s private sector – To help MCs’ economies entities: The Islamic Corporation for the solutions, allowing – To connect with new partners Insurance of Investment and Export Credit for a sustained – To promote cross-border investment (ICIEC), the Islamic Corporation for the and support the private sector, trade, Development of the Private Sector (ICD) flow of investment exports and FDI in participating and the International Islamic Trade Finance countries. Corporation (ITFC). and trade into and among MCs X The initiatives have been launched and X The global pandemic gave rise to a new implemented successfully in more than need to sustain foreign direct investment 30 countries, with plans to extend to more (FDI) momentum through virtual means in countries. the absence of physical options and in light of the lockdowns and travel restrictions X The COVID-19 pandemic has given worldwide. a major push to digital solutions. These initiatives placed digital innovation in X The aim of this cooperation is to help the service of development, ultimately increase FDI net inflows for MCs by more contributing to achieving the SDGs. than US$ 100 billion, of which US$ 50 billion will come from intra-OIC investment. X The initiative will help IsDB to support its MCs by developing their investment and X The initiatives are: trade capabilities, including connecting – Digital country presentations for with new partners, enhancing South-South investment and trade opportunities cooperation, sharing experience and co- – Made in… series for SMEs financing development projects. – Virtual pitch competitions for start-ups. X There is focus on creating an environment for sustainable and inclusive growth.
ACHIEVEMENTS X Working through IsDB Group’s Business Forum (THIQAH), the Ministry of Economy of the United Arab Emirates and the Annual Investment Meeting, IsDB Group has announced the online initiatives, which have already been implemented successfully in more than 30 MCs.
Investment/trade opportunities X The three initiatives are targeting clear objectives to meet their goals.
[ 54 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
– Networking with potential Over 30 start-up winners in MCs partners from around the globe who are interested in importing a specific product or service from the presenting SMEs.
Start-ups Virtual Pitch Competition X Over 500 selected companies competed for the prizes: – Providing a virtual landscape for start-ups to shine, connect, network and explore global market penetration – Connecting start-ups globally and supporting them in meeting potential partners and investors from other parts of the world Implemented in more than 30 countries – Holding digital pitch competitions in several MCs, with one winner of each competition invited to be part of the final Global Start-ups Champions League – Discovering successful start-ups with huge potential to expand and to penetrate the market with full confidence.
INVESTMENT X Through THIQAH, IsDB Group’s Total value of investment/trade opportunities and private sector entities will be able projects: US$ 10+ billion to increase FDI by promoting and showcasing cross-border investment among MCs, with expected inflows Digital Country Presentations networking with potential set to exceed US$ 100 billion FDI. X The total number of investment investors, partners and financiers. and trade opportunities and projects is in excess of US$ 10 billion. The Made In… Series THIQAH ONLINE INITIATIVES initiative: X This series serves as a digital – Provides a critical virtual platform for SMEs’ industry projects, The aim of this cooperation gathering for investors, products and services, aimed at: government agencies, private – Achieving economic growth and is to help increase FDI net corporations, financial increasing country exports while institutions and investment securing funding for their projects inflows for MCs by more than promotion agencies which will – Enabling SMEs to promote their allow countries to promote locally manufactured products US$ 100 billion their investment and trade and display them for the of which opportunities opportunity of global exposure, – Promotes and showcases giving them recognition on a the investment and trade larger retail field US$ 50 billion opportunities in MCs – Creating more awareness of value will come from intra-OIC – Serves as a strategic and propositions while enhancing innovative online platform to competitiveness for locally investment support investment promotion manufactured products and agencies in connecting and services in the global market
[ 55 ] SDGs
Supporting Egypt's clean energy projects
he Islamic Corporation for the Development of the Private Sector (ICD) aims to support Egypt’s Tgoal in achieving its emission reduction targets under the Paris Climate Agreement
– Improve the efficiency of its power PURPOSE This initiative sector X The Government of Egypt launched demonstrates – Reduce reliance on costly fossil fuel a Feed-in Tariff (FiT) renewable energy ICD's focus on the imports. programme in 2014 with the aim of attracting enough private investment to renewable energy METHOD facilitate the development of 4,300 MW of space as well wind and solar photovoltaic capacity in the X In 2017, the ICD approved a credit country. as an expanding envelope of up to US$ 75 million to finance the construction and operation of new X The Government also plans to: cooperation solar PV independent power projects – Secure 20% of its electricity generation with strategic being developed under the Egyptian FiT from renewable sources within the programme, in partnership with leading coming decade international development finance institutions including – Increase Egypt’s energy security by development finance the EBRD, the Green Climate Fund and the exploiting the country’s vast renewable Dutch Development Bank (FMO). energy potential institutions The Alfanar project X This project comprised the building of a 50 MW solar PV power plant in the Benban Solar Park in the Aswan province of Egypt, which is set to be one of the largest solar energy parks in the world. The total project was funded with equity and debt, with equity funding provided by the Alfanar company, a leading Saudi energy conglomerate active in the GCC region, and senior financing provided by the EBRD and the ICD.
X The project is expected to abate up to 100,000 tons of CO2 equivalent per annum, supporting Egypt’s emission reduction targets under the Paris Climate Agreement, as well as promoting sustainable energy development and private sector participation in the country’s energy landscape.
Scatec Solar projects X Scatec Solar ASA (SSO) is a Norwegian company that develops, builds, owns, operates and maintains solar power plants globally. The company is developing six projects for the Egyptian FiT programme, in partnership with
[ 56 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
ACHIEVEMENTS X This initiative demonstrates: – ICD’s focus on the renewable energy space – ICD’s efforts in expanding cooperation with strategic international development finance institutions – ICD’s commitment to an important Member Country, Egypt, in its journey towards sustainable economic development and alignment with the SDGs – ICD’s dedication in assisting the socioeconomic development in Benban by providing the local population with infrastructure, job creation, and skills training.
INVESTMENT X The Alfanar project is funded with a term finance facility of up to US$ 28.5 million.
X The Scatec solar projects are funded by six term finance facilities for a total of US$ 24 million.
NEW SOLAR PV INDEPENDENT POWER PROJECTS
ICD approved a credit
envelope of up to prominent international investors X The annual 870 GWh of including Norfund and Africa50, the electricity produced from the 400 US$ 75 million Infrastructure Fund for Africa. The MW solar plants will avoid about to finance the construction projects will have a total installed 350,000 tons of CO2 emissions per generation capacity of 400 MW and year, supporting Egypt’s emission and operation of new solar PV will be based in Benban Solar Park. reduction targets under the Paris The total cost of the projects will Climate Agreement. Egypt has independent power projects be funded by sponsor equity and committed to increase the share of senior financing provided by the renewables in the country’s power EBRD, IsDB, FMO and the ICD. mix to 37% by 2035.
[ 57 ] SDGs
Change for impact: transforming agriculture and rural development in MCs
ublished by IsDB in 2018, the book Change for Impact: Transforming Agriculture and Rural Development in P IsDB Member Countries has broadened awareness of IsDB’s work in its MCs
– Improved rural infrastructure, such as PURPOSE This publication roads, markets and irrigation systems X IsDB is committed to growing the identifies important for rural communities agriculture sector of its MCs and enabling lessons and – Knowledge about what we should do these countries to achieve the SDGs. There differently in the future, such as: is growing evidence that improvements opportunities for – Having representatives on the ground in the agriculture sector can generate a transforming the – Engaging with the private sector multiplier effect. – Enabling value chains that link farmers agricultural sector in to markets and create rural jobs for X Various development studies have youth and women. shown that US$ 1 invested in the MCs. It also explores agriculture sector in sub-Saharan Africa opportunities to X The publication, Change for Impact, has impacts that can lift at least 16 people stems from the desire to raise awareness out of poverty. engage with a wide of IsDB’s new business model, especially range of stakeholders concerning GVCs and private sector X IsDB is working to ensure that the engagement, and to share with a wider needed investments are made, especially (including the private audience IsDB’s wide-ranging knowledge of by the private sector, so that agriculture will sector, development agriculture and rural development. grow sustainably at scale over the longer term. These investments also need to be partners and civil METHOD integrated to generate impactful change. society) in the X Through case studies, the book explores X Outcomes of IsDB’s investment in the transformation IsDB’s role in fostering sustainable, agricultural sector include: process inclusive and integrated growth in the – Better access to good quality, high- agriculture and rural development sector. yielding seeds for farmers in many MCs X It sheds light on the critical pathways to impactful investment, using IsDB’s new business model of a global value-chain approach and strong partnerships with development partners.
X The book serves as a guide to IsDB’s commitment to transform the agricultural sector in its MCs. It provides balanced reflections on the past and valuable lessons that inform the way forward.
X The publication addresses issues faced by the agricultural sector in many IsDB MCs, including: – Low productivity – Climate change
[ 58 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
resilience of crop and livestock X The Asian Development Bank production systems and raise chose two of the case studies productivity in ways that enhance featured in the book (‘How to boost food security and generate the productivity of smallholder extra outputs that can go to farmers’ and ‘Lessons from an remunerative markets Islamic approach to rural financing’) – Case studies from IsDB for publication on its website to investments in MCs in Asia and showcase best practices. sub-Saharan Africa – The importance of community X Publication of the book empowerment, inclusive contributed to the design and financing and youth employment resource mobilisation of the Regional to achieving sustainable Rice Value-Chain Programme in sub- transformation Saharan Africa. It allowed IsDB to – Environmental degradation – Practical mechanisms that can bring onboard several traditional and – Food insecurity be used to expand access to non-traditional partners to mobilise – High unemployment among financing in rural areas in ways grant resources for the programme youth and women. that empower communities to support the beneficiary countries. and generate jobs for youth and X It addresses the need for women INVESTMENT transformation in the sector in order – Why strategic partnerships, to eliminate hunger and malnutrition both financial and technical, are X By the end of 2017, IsDB and create a platform for sustainable necessary for expediting the had invested US$ 12.6 billion in and inclusive economic growth that needed transformation agriculture and rural development, leaves no one behind. – How partnership arrangements reflecting significant growth over the can be developed to share previous decade. This work is helping X It does so by considering lessons knowledge and experiences, and with the achievement of SDG 2 (Zero from the past about what worked continuously bring on board critical Hunger) and will continue to yield well and what did not to change innovations to achieve impacts strong benefits in the future. agriculture for impact. – Challenges hampering the sound implementation of projects in X The book does not seek to provide many IsDB MCs a comprehensive assessment of all – The reverse linkage approach, ISDB INVESTMENT the development programmes and a results-oriented technical projects that have been financed by cooperation mechanism IsDB on behalf of its MCs. Instead, pioneered by IsDB US$ 12.6 billion it uses various representative – Lessons from the evaluation of invested in agriculture and programmes and projects as case IsDB-financed operations over the studies to draw out generalised past four decades that will inform rural development learnings that show the way forward. its future interventions.
X The 13 concise and interrelated X Its long-term aim is to chapters cover the following content: create productive, resilient and US$ 1 invested in the – IsDB’s agriculture and rural commercialised value chain-led development strategy and agriculture sectors that meet the agriculture sector in sub- methodologies for financing food and nutritional security needs of agricultural investments at scale the growing populations in IsDB MCs. Saharan Africa can lift at – The transformation required to sustainably increase agriculture ACHIEVEMENTS least 16 people out of (crops and livestock) and water productivity in the face of climate X Due to its popularity, the book poverty change was translated into French and – Practical solutions that can be Arabic for IsDB’s 2020 Annual deployed at scale to build the Meeting in Jeddah.
[ 59 ] SDGs
Regional Cooperation and Integration Policy
sDB has launched an initiative to support regional cooperation and integration Iamong its MCs
X These RCI instruments and PURPOSE IsDB’s Regional interventions provide guidance on X Since the development of the Cooperation Policy programming, planning, implementing, P5P, IsDB has been pursuing various and Strategy supporting and resourcing sector and targeted initiatives in MCs to enable the other thematic-based operations classified movement of goods, services, information, will enhance the under regional cooperation and market technologies and people across borders. capacity of MCs to integration activities. These include: – Regional cooperation and integration attract domestic and X Although MCs are already part of large (RCI) interventions (infrastructure regional integration and connectivity projects, grant programmes and foreign investment projects and regional trade preferential investment promotion initiatives) for sustainable agreements, many are performing poorly – Policy instruments (RCI Policy, RCI in terms of intraregional trade, intraregional Strategy, RCI baseline reports, Regional development FDI flows, and cross-border energy and Cooperation Organisations (RCO) power connections. mapping reports) – Strategic orientation guidelines (RCI X To address these challenges, IsDB has action plans, RCI COVID-19 impact developed the RCI Policy, which aims at reports and Development Finance narrowing development gaps between and Assessment Index (DEFAI) strategic within countries by: allocation mechanisms) – Improving market access and sharing resources – Building closer trade and investment integration across sectors and industries – Connecting lagged or isolated areas to more economically vibrant regions – Establishing stronger financial links.
METHOD X The RCI Policy and all subsequent RCI interventions and instruments are closely aligned with the P5P and IsDB’s new business model, which repositions IsDB towards a catalytic role that facilitates cooperation among developers at every step of the development cycle. The policy is also closely related to the new IsDB MCPS, complementing its country- centred analysis with a wider, more holistic approach.
X The policy benefits from the activities of IsDB Group entities such as the ICD, the ICIEC and the ITFC in supporting trade and
[ 60 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
investment for development. It is X Value-chain analysis guides the – US$ 1.0 billion for MENA region. founded on three guiding principles: implementation of the RCI Strategy, – Anchor interventions in the SDGs and RCI considerations will be part of X This represents: – Support regional value-chain MCPS preparation. – RCI financing allocated for cross- integration as a step towards border connectivity — about better integration in the GVC US$ 3.5 billion ACHIEVEMENTS – Promote knowledge sharing. – RCI under regional public goods X To date, the outcomes of IsDB’s for US$ 722 million X IsDB’s role of tying end RCI interventions are as follows: – Trade and Islamic finance and beneficiaries (demand-side) with investment — US$ 374 million contributors (supply-side) through X Policy instruments: RCI Policy and and US$ 137 million of total RCI a global grid of developers is one RCI Operational Strategy, Annual RCI finance respectively. of the main guiding principles of all baseline reports and RCO mapping RCI interventions. This sees IsDB reports X Following the deployment of the undertaking RCI-related roles as RCI Policy and strategy instruments, advisor, financier, capacity builder X Strategic orientation guidelines: the three RCI grant programme and knowledge broker, and partner. RCI Action Plans Framework, initiatives have collectively raised COVID-19 Impact Report on RCI to approximately US$ 3.2 million X Multiple SDG targets explicitly guide IsDB’s Strategic Preparedness grant financing from development recognise the importance of planning and Response Programme, and partners, often with new developers. and cooperation at the national, the first-ever regional strategic regional and international levels. resource allocation model (the X Going forward, IsDB will strive to DEFAI model, which helps guide attract and leverage global lending X Following IsDB’s approval of country allocations in support of resources to the tune of US$ 1.25 the first RCI Policy in July 2019, a the identified SDG financing gaps of billion initially to support RCI detailed RCI Operational Strategy MCs) operations, including both internal was approved in December and global initiatives. Similarly, IsDB 2020. The strategy includes an X RCI impact on IsDB portfolio will target US$ 5 million in grant assessment of IsDB’s RCI operations at a financing level: The average financing from partners. and partners in coordination with annual share of RCI approvals in IsDB partners (such as the OIC total approvals is between 24% and General Secretariat, GCC, ECO, 37% of IsDB portfolio. This clearly NEPAD, AMU, AfDB, ADB, ECOWAS, shows the importance of IsDB RCI SESRIC, COMESA, UNESCWA and operations as they constitute around other partner institutions) and a quarter of IsDB’s operations. stakeholders encompassing all Regional Hubs and MCs. X RCI grant financing — capacity building instruments: three grant X The strategy adopts sub- programmes that contribute to the regional programmes through RCI RCI agenda in IsDB, collectively action plans, which include various offering an efficient tool to REGIONAL COOPERATION AND economic sectors and are built on support IsDB’s efforts to realise INTEGRATION IMPACT four basic pillars: better cooperation among MCs, – Strengthening cross-border by providing soft capacity and The average annual share connectivity technical assistance to complement – Improving the investment climate IsDB’s hard regional integration of RCI approvals in total and FDI infrastructure. – Promoting Islamic trade and approvals is between finance INVESTMENT – Support for regional public goods. X IsDB approvals for RCI projects 24% and 37% X Within this strategy framework, (2016–2018) include: of IsDB's portfolio a significant share (approximately – Around US$ 2.3 billion for Africa 30%) of financing approved by IsDB is region, allocated annually to regional projects. – US$ 1.4 billion for Asia region, and
[ 61 ] Empowering public and private sectors, philanthropists and people
[ 62 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
[ 63 ] SDGs
STI Policy and Operational Strategy
hrough several programmes designed to boost innovation and speed up digitisation, IsDB aims to support T development activities in MCs and promote the creation of new lines of business for IsDB
X As part of its STI Policy, IsDB has PURPOSE IsDB’s STI policies established an innovative programme X IsDB has a new STI Policy that aims and programmes designed to support MCs in developing to mainstream STI into IsDB’s operations are transforming their STI institutional capacities to address and supports MCs through an array major development challenges. Working of activities that enhance national STI the culture of with IsDB Regional Hubs and development ecosystems, such as capacity building and IsDB, enabling partners, the programme puts emphasis on training, policy support and international the least developed MCs (LDMCs). collaboration. more effective X IsDB has also set up a special team, X STI Policy works together with the STI interventions in MCs tasked with challenging the organisation’s Operational Strategy to help IsDB achieve and improving the current work patterns and introducing its digital transformation objectives, in the agility in all departments. The project, following ways: efficiency of IsDB’s which is currently being rolled out, aims to – Reinforcing the Delivery pillar of the P5P, internal operations align digital transformation with day-to-day through operations integration business activities that are among the core – Helping in the identification of STI drivers for achieving the P5P and the 10YS. priorities and needs of MCs – Supporting IsDB’s efforts to realise its METHOD vision and contribute to the attainment of the SDGs X An IsDB document focusing on SDG – Promoting and strengthening the STI mainstreaming is providing a framework for ecosystem in MCs through capacity the role of STI in achieving the SDGs in MCs. building, policy support and adequate IsDB has established a strategic partnership policy instruments. with UNESCO to support STI efforts and strengthen inclusive STI systems in MCs. The partnership has already yielded significant achievements, such as the Global Observatory of Science, Technology and Innovation Policy Instruments (GO-SPIN) methodological tool to map STI landscapes.
X IsDB’s STI programme operates in harmony with the P5P and priority sectors such as energy, health, agriculture and education, as it encompasses training, improvement of STI infrastructure, formulation of policies, and acquisition of proposed technologies. It takes the lead to forecast strategic trends in development and advise how STI can contribute to the identification of innovative solutions for MCs.
X IsDB’s Information Management and Disruptive Technology Department has
[ 64 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
X Meanwhile, outcomes of IsDB’s digitisation process so far include substantially improved internal responsiveness, visibility and transparency as IsDB heads towards a zero-paper environment.
INVESTMENT X IsDB established the STI Transform Fund in 2017 with an initial capital of US$ 500 million. The Fund supports four categories: new ideas with proof of concept, scaling up of innovative projects, commercialisation of technology, and capacity building in STI.
X IsDB has approved and disbursed US$ 1.5 million to improve the lives and economic viability of the rural poor living in remote, inaccessible villages off the energy grids by supplying their communities with clean, low-cost household lighting from solar energy in the nine selected MCs. It has approved supported IsDB’s organisational in seven out of nine selected MCs an amount of over US$ 1.6 million to transformation with a programme (Afghanistan, Syria, Indonesia, promote peace, social inclusion and of Digitisation, Decentralisation Mali, Senegal, Burkina Faso and employability in conflict communities and Delegation of Authority. Its Cameroon) with electrification in Uganda. To date, US$ 378,400 primary focus is delivering smart, equipment. In addition, 40 women (23.3% of the approved amount) have innovative solutions, with a view to from all the nine MCs (Afghanistan, been disbursed. enhancing user communication and Syria, Indonesia, Mali, Senegal, collaboration. Burkina Faso, Cameroon, Somalia X IsDB’s Digitisation Enterprise and Jordan) have been trained in Project has been rolled out to more solar engineering with ‘Solar Mamas’ than 1,000 users and IsDB, with ACHIEVEMENTS from Afghanistan, Mali, Burkina Faso estimated potential cost savings of X The partnership with UNESCO and Jordan successfully trained on between US$ 11 million and US$ 14 is helping build STI ecosystems in beekeeping business as a secondary million. If utilisation of the system Mozambique and Uzbekistan, with a livelihood activity. This is in spite of increases, savings can reach US$ 14 focus on reviewing the existing STI the fact that the COVID-19 pandemic million a year. landscape in these two countries has affected the overall progress and to determine strategic areas for slowed down supply chains. investment and recommend SCIENCE, TECHNOLOGY AND policies to improve the existing STI X An initiative called Promoting INNOVATION TRANSFORM FUND ecosystem. The projects will serve as Peace Education Entrepreneurship a pilot to set a framework that could and Connectivity in the Most IsDB established the STI be replicated in other MCs. Vulnerable Area of Uganda, in partnership with the Whitaker Peace Transform Fund in 2017 X IsDB’s Regional Community and Development Initiative, was Development Programme for launched in July 2020. A total of with an initial capital of Rural Women Solar Engineers and nine programme inception meetings Entrepreneurs, in partnership with were held for this STI-based project, US$ 500 million Barefoot College International, has attended by 281 participants so far supplied 2,297 households including 218 males and 63 females.
[ 65 ] SDGs
Launching the Engage Platform
aunched in 2017, Engage is a digital hub created by IsDB to accelerate economic and social L progress in the developing world through the power of science, technology and innovation
X Through its Call for Innovation PURPOSE Of the 95 innovative and its embedded comprehensive X Closely aligned to the SDGs, IsDB’s development screening process, Engage creates a Engage platform creates an innovation solutions leveraged conducive ecosystem for crowdsourcing ecosystem for engaging and connecting and leveraging innovations and new key actors (innovators, investors, through Engage to technologies that have the potential to academics, start-ups, philanthropists and date, 50% are led address key development challenges faced governments) to help countries meet the by MCs. goals. by women METHOD X The aim is to incentivise, catalyse and harness innovation for creating new X Engage enables the world’s developing technologies and solutions that address communities, including innovators, SMEs, challenges related to the following SDGs: the private sector, non-governmental – SDG 2 (Zero Hunger (food security)) organisations, companies and – SDG 3 (Good Health and Well-being) governments, to benefit from tailored – SDG 4 (Quality Education) mentoring services and access to financial – SDG 6 (Clean Water and Sanitation) resources and expert advice. This can – SDG 7 (Affordable & Clean Energy) help activate and nurture new ideas and – SDG 9 (Industry, Innovation and proposals which could become realistic Infrastructure). development solutions.
X The Engage platform: – Provides knowledge sharing about global science, technology and innovation (STI) trends to let stakeholders assess impact and achievements – Hosts online learning resources – Acts as an information centre for intellectual property and initiatives such as STI innovation competitions, Transformers Roadshows, Transform Fund Annual Call for Innovation, webinars etc.
X Through Engage, subscribers can benefit from the following services: – Call for Innovation — A structured tool for crowdsourcing innovations across various sectors and themes – Matchmaking — A service connecting innovators, investors and institutions looking for partners or new business opportunities by matching peers to deliver powerful applied innovation
[ 66 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
– A series of webinars organised to engage various stakeholders.
INVESTMENT X Through its structured Call for Innovation tool, Engage has so far leveraged 95 innovative development solutions.
X The Transform Fund has invested US$ 17.33 million to support the above solutions for addressing challenges related to the six selected SDGs: SDG 2 (11 solutions); SDG 3 (39 solutions); SDG 4 (15 solutions); SDG 6 (9 solutions); SDG 7 (3 solutions) and SDG 9 (18 solutions).
– Technology Transfer — A – An Internal STI Innovation collaboration promoting Competition for IsDB staff technology transfer between – Call for applications for STI developing and developed Prize recognising outstanding countries achievements – Development Solutions — A – Transformers Roadshows, which wide range of STI-led solutions, are conducted regularly as part of which can be leveraged to the Platform’s activities. promote sustainable and inclusive development and address the X The Engage website has achieved developing world’s most pressing the following: challenges in key sectors. – Around 15,600 user registrations, covering innovators, investors and CALL FOR INNOVATION TOOL X Engage creates an integrated corporate organisations ecosystem, offering all stakeholders – Approximately 200,000 platform Engage has so far leveraged the opportunity to drive changes that visits, leading to over 1,080,000 can transform communities. page views. On average, visitors 95 innovative development spend 4 minutes reading Engage X With its focus on six SDGs, content solutions Engage accelerates STI-led solutions – Around 80% of web traffic to drive inclusive and sustainable sourced from Engage social development in MCs. media channels (150,000 FUND INVESTMENT Facebook followers, 11,800 Twitter and 1,000 LinkedIn ACHIEVEMENTS followers) The Transform Fund X Every year, Engage launches – Transform Fund project blogs and implements several Calls for tagged with relevant UN has invested Innovation: Observances for promotion — – Annual Transform Fund Call for such as the UN International Day US$ 17.33 million Innovation, the most recent being of Banks, World Science Day, World dedicated to COVID-19 Cities Day, Africa Industrialisation to support these solutions – A call for Saving Women’s Lives Day, UN Day for Solidarity with the from Cancer Palestinian People
[ 67 ] SDGs
Transform Fund
sDB is committed to helping its MCs through STI to address socioeconomic problems Iand achieve the SDGs
– Promote the capacity of research PURPOSE Through institutions in MCs through the capacity X With more than 100 million people programmes such building programme joining the job market every year, MCs have as the Transform – Ensure the development of an unmatched challenge and opportunity entrepreneurship at the same time. This supply of labour, Fund and related – Help MCs achieve the SDGs. which would be a challenge under current activities, IsDB conditions, is also a huge source of X The Fund supports initiatives in four opportunity for entrepreneurship and is strengthening categories: innovation. – New ideas with proof of concept innovations and – Scaling up of innovative projects X By providing an alternative opportunity promoting the – Commercialisation of technology to raise funds for innovative projects, the – Capacity building in STI. IsDB Science, Technology and Innovation sharing of new ideas Transform Fund (IsDB-STIF, also referred and development X Transform Fund projects are generally to as the Transform Fund), run by IsDB divided into grants and equity projects. Innovate, combines a grant scheme with a solutions between The grant projects are for supporting dedicated crowdfunding platform to raise MCs initial ideas/proof of concept and capacity funds for innovators around the world. It building projects, while the equity projects is targeted towards MCs’ development are for commercialisation and scale-up programmes, as defined in the MCPS. projects.
METHOD ACHIEVEMENTS X The Fund was established in 2017 with X Since 2018, 78 grants and 17 equity an initial capital of US$ 500 million. Its main projects have been selected in MCs and objectives are to: non-MCs. – Provide financial and technical support to scientists, innovators and X The 2020 Call for Innovation saw 19 entrepreneurs grants and 11 equity projects selected, – Facilitate the commercialisation of revolving around the theme of the COVID-19 technology crisis. The contracts are being prepared and project implementation has been ongoing.
X Earlier Calls for Innovation launched through the Transform Fund’s marketing platform, Engage, yielded winning proposals focusing on Saving Women’s Lives from Cancer, and on internal STI innovation at IsDB. The projects arising from these Calls are being processed for mainstreaming within IsDB and beyond.
X The third annual Transformers Academy was held virtually due to COVID-19
[ 68 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
– Transformers Roadshow Niger — Held in Niamey, this event attracted more than two hundred entrepreneurs, scientists and innovators across Niger – Transformers Roadshow Uzbekistan — Held in Tashkent, with four innovators awarded US$ 3,000 each – Transformers Roadshow Pakistan — Held in Islamabad with more than 230 applicants – Transformers Roadshow Bosnia & Herzegovina — Held in Sarajevo, the event saw four teams constraints. The aim of this Academy winning innovators pitched concepts rather than three awarded the was to provide guidance and training supporting the SDGs. US$ 3,000 prize to the winners of the 2020 Transform – Transformers Roadshow Egypt — Fund Call for Innovation. IsDB X The roadshow winners were Held in Cairo with more than 100 mentors and global experts provided invited to attend the Transformers applicants. training in project management, Summit held in Senegal to give financing and IP. them the opportunity to connect INVESTMENT and network with other innovators, X As part of IsDB’s drive to investors and scientists. X The Transformers Summit is increase its visibility under the P5P, becoming a key event that underlines it is engaging in multi-stakeholder X By December 2020, IsDB IsDB’s commitment to invest in forums and roadshows within the Innovate’s online activities had untapped talent in its MCs for the Transform Fund’s activities. secured 1,439,000 page views, with achievement of their development 22,100,000 people reached in 208 needs and targets under the SDGs. X The Transformers Summit — countries via social media. In December 2019, the Republic X In 2019, the Republic of Senegal of Senegal hosted the second X Currently, the IsDB Innovate hosted the second Transformers Transformers Summit under the platform is live in nine MCs, Summit. Under the title ‘Make cities patronage of the President of showcasing over 50 projects. All and human settlements inclusive, Senegal, Mr Macky Sall, and the winning Transformers’ projects safe, resilient and sustainable’, the President of IsDB, Dr Bandar Hajjar. will be posted on the platform to Summit, held in Dakar, brought The Summit followed a one-week continue IsDB support for them. together investors, entrepreneurs, comprehensive and customised There are 3,292 donors so far, and innovators, NGOs and global leaders training programme for the the top 10 countries in terms of fund to discuss the role of STI in achieving Transform Fund. raising are Algeria, Bangladesh, Côte SDG 11: Sustainable Cities and d’Ivoire, Egypt, Guinea, Indonesia, Communities. X Transformers Roadshows Libya, Morocco, Tunisia and Turkey. — In 2019, seven Transformers Roadshows took place in Uzbekistan, X Two projects, Electrifying Niger SCIENCE, TECHNOLOGY AND Bosnia, Niger, Pakistan, Bangladesh, with Bioenergy and Competency- INNOVATION TRANSFORM FUND Kazakhstan and Egypt. based Training for Poultry Farming in Cameroon, have embarked on 22 applicants were X The aim of the roadshows was to crowdfunding to raise the funds accelerate STI-led initiatives across they require. The Niger project selected to win a prize of MCs and Muslim communities in seeks a total of US$ 10,000 and the non-MCs. Cameroon project has a target of £5,000. US$ 3,000 X In total, 22 applicants were each to develop their ideas selected to win a US$ 3,000 prize X Transformers Roadshows held in each to develop their ideas. The 2019 and 2020 are as follows:
[ 69 ] SDGs
Islamic Finance Country Assessment Framework
he IsDB Group has a specialist division tasked with providing advisory and technical assistance Tservices to MCs for the development of the Islamic financial sector
X In line with the P5P, the IF-CAF aims to: PURPOSE The Islamic Finance – Enhance responsiveness through faster X IsDB has established a framework that Country Assessment identification of priorities in each MC allows for an assessment of MCs’ strengths Framework aims – Improve efficiency and speed of and resilience and gaps in the Islamic project approvals, disbursements and finance ecosystem in these countries. to connect IsDB deployment of funds Group's core – Create optimal transparency and X The Islamic Finance Country accountability through oversight and Assessment Framework (IF-CAF) is a key strategic pillar of measurement of effectiveness programme which aims to connect the – Assess the current capabilities of the IsDB Group core strategic pillar of Islamic Islamic finance Islamic finance ecosystem, identifying finance development with various IsDBI- development with the gaps in its ability to create an IsDB Group initiatives such as: enabling environment. – GVCs various initiatives in – MCPS MCs METHOD – OED Key Recommendations. X The IF-CAF is a framework to assess the Islamic financial sector from a perspective of achieved as well as potential impacts on the economy and its contribution towards the well-being of society.
X It recommends ways to develop this sector such as: – Strengthening the surrounding communities with economic empowerment and financial inclusion – Aligning with the United Nations 2030 Agenda for Sustainable Development and its SDGs.
X The methodology adopted for this project comprises two key stages.
X Stage 1 includes the development and approval of the Framework, including the guidelines, components, objectives, rules and methodology for conducting the country assessments in an objective and consistent manner. This stage has the following steps: – Desk research — Undertake a holistic study of all publicly available financial sector assessment frameworks by other MDBs and international agencies and review publicly available diagnostic
[ 70 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
or assessments reports and/or X The first stage of the project frameworks on the Islamic and/or is nearing completion, with the conventional finance sectors development of a sound and effective – Analytical appraisal — Review assessment framework to enable: and analyse the relevant – Early identification of strengths documents/ information/data and gaps of an Islamic finance gathered in the desk research, ecosystem (legal, regulatory, alongside IsDBI and IsDB’s supervisory, tax, governance, relevant internal documents, financial inclusion, etc.) in each plans, strategies such as the country 10YS and the P5P, regulations – Proposal of the most suitable and data IsDB intervention strategies to – Assessment and benchmarking derive maximum impact and — Create a pool of best effectiveness for Islamic finance practices adopted by MDBs and development. international agencies that can be used as a benchmark in the could also be adopted, wholly or X In 2022, the second stage of the development of the IF-CAF partially, by the IF-CAF project will begin. This will comprise – Modelling — Identify the – Identify the critical components field study and assessment of MCs. qualitative assessment criteria for of an Islamic finance ecosystem The project is expected to continue the IF-CAF and map the way in and the qualitative assessment on a long-term basis to cover all 57 which it can be transformed into criteria which can measure MCs and provide support to MCPS scoring metrics effectiveness and GVC initiatives. – Finalising the Framework — – Develop a clear system for Engage with internal IsDBI, quantification that will allow MCs INVESTMENT IsDB Group and other external to be assessed and scored, to stakeholders (such as other propose optimal support that is X The project utilises the services MDBs, industry experts, etc.) adequately structured to their of a renowned international Islamic to have feedback on the bespoke needs and priorities finance consulting firm, along with development process, outcome – Benefit from expert inputs technical review and inputs from and the results obtained in a pilot both internally, within IsDBI- IsDBI’s Islamic Finance Advisory and programme consisting of five IsDB Group, as well as external Technical Assistance Division and MCs. industry stakeholders to enable the IsDBI-IsDB Group project team. a practical framework in line with X Stage 2 is the implementation of IsDBI-IsDB Group’s visions and X Field implementation and the Framework, including: aspirations. assessment exercises are expected – Actual assessment of all MCs and to be undertaken during 2022 as development of studies/reports conditions become clearer following ACHIEVEMENTS for each MC outlining the findings, the COVID-19 pandemic. results and recommendations X Planned outcomes for the IF-CAF – Using results from IF-CAF include: assessment of all MCs to serve – Ensuring that resources are ISLAMIC FINANCE COUNTRY as a crucial input mechanism into optimised in the most effective ASSESSMENT FRAMEWORK the larger MCPS of MCs for the and efficient manner for strategic pillar of Islamic finance. achieving IsDB’s strategic goals The programme aims to – Enabling MCs to emulate the X The methodology will: strengths and success factors connect IsDB Group’s core – Result in the formulation of an of the countries where Islamic strategic pillar of Islamic IF-CAF that is attuned to the finance industry is successful strategic objectives of the 10YS – Enabling MCs to identify gaps in finance development with and P5P the Islamic finance ecosystem in – Be attentive to the effectiveness order to prioritise development GVCs, MCPS and OED key of existing MDBs’ and agencies’ efforts to address those gaps in recommendations frameworks, carefully selecting order to achieve more efficient appropriate best practices that outcomes.
[ 71 ] SDGs
Economic Empowerment Investment Policy
sDB’s Economic Empowerment Investment Policy guides IsDB’s future economic empowerment I operations and provides a framework for investing with the poor for mutual profit and impact
– Establishing an effective network of PURPOSE The enabling regional and international partnerships X Economic empowerment is one of infrastructure to mobilise the financial and technical the pillars of the P5P to address the of the Economic resources necessary for the success transformational changes faced by IsDB and sustainability of economic MCs. It aims to transform people who are Empowerment empowerment initiatives in MCs aid-dependent into empowered individuals Investment Policy – Making Islamic financial modes with dignity and to integrate them into widely available and enabling the poor the development ecosystem by making will help IsDB to to engage in economic activities by markets work for their benefit through participating in value chains; increasing incubation and partnerships. promote economic and promoting the demand for Islamic empowerment to finance in the targeted MCs X The strong complementary goals of – Targeting the poor and fragile groups the P5P and economic empowerment its partners and in MCs and helping them to overcome will create the synergy needed to achieve design appropriate various obstacles and barriers mutual objectives: that prevent them from accessing – Involving the poor in productive solutions that meet the markets; supporting the rapid activities; engaging value chains of their needs implementation of crisis recovery products with comparative advantage programmes in MCs locally and globally; creating decent jobs – Highlighting and reinforcing IsDB’s through linking the poor producers to role as a global leader; leveraging the markets and providing them with fair knowledge generated by the initiatives market opportunities to maximise their to enhance operations and make it benefits possible to transfer the knowledge to other target countries, allowing for the expansion and replication of economic empowerment initiatives globally.
METHOD X The economic empowerment portfolio assets managed by IsDB or external managers on behalf of IsDB are governed by IsDB’s Economic Empowerment Investment Policy (EEIP). This covers investments in economic empowerment operations derived from various sources including IsDB’s ISFD, ordinary capital resources (OCR) and trust funds provided by donors.
X The EEIP focuses IsDB’s future economic empowerment initiatives on: – Addressing the poverty alleviation and employment creation needs of MCs – Aligning operations to support
[ 72 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
economic empowerment solutions as part of IsDB efforts to enhance the quality of its interventions.
INVESTMENT X The EEIP has facilitated the mobilisation and design of several initiatives by the Economic Empowerment Department (EED). The EED successfully mobilised more than US$ 450 million, overachieving the 2020 target of US$ 50 million. Of this sum: – US$ 80 million was mobilised for the Economic Empowerment Fund for the Palestinian People – US$ 327 million was mobilised from partners under the Strengthening the Economic Resilience of Vulnerable Enterprises (SERVE) Programme implementation of economic X IsDB will promote economic (see page 92) empowerment and access to empowerment solutions through – US$ 43 million was mobilised finance for the SDGs related to capacity-building platforms such as from other economic poverty and the IsDB corporate courses, workshops and seminars. empowerment programmes. direction set by the P5P and the These solutions will also be 10YS. promoted through a website. X The EEIP supports the SERVE Programme, designed to provide X The EEIP aligns with core IsDB X IsDB will establish and manage immediate and targeted cash-flow policies such as: the economic empowerment funds support to businesses that are – Allocation of a maximum of 30% initiated by it or proposed by different adversely impacted by COVID-19 of the ISFD Waqf paid-in capital stakeholders. as well as to sustain their business to be invested directly towards operations beyond the crisis. IsDB poverty alleviation X IsDB may provide equity and Group contributed US$ 120 million of – Economic empowerment other modes of financing to the US$ 327 million mobilised. initiatives utilising development economic empowerment institutions Waqf resources to be made in line created by IsDB or proposed by the with the ISFD Poverty Alleviation different stakeholders. Policy. INITIATIVE MOBILISATION X Economic empowerment programmes will include a line of POTENTIAL IMPACTS The policy is expected to finance and capacity building in X IsDB is committed to taking collaboration with internal and/or govern a portion of the several actions in line with the EEIP: external stakeholders. – Providing toolkits that will help 30% allocation of guide financial partners to engage X A business engineering mode of their clients as business partners intervention will be implemented, ISFD Waqf paid-in capital, – Developing IT solutions (financial with the aim of developing and non-financial) to reduce the approaches, tools, manuals and IT/ estimated at about high operating cost of channelling fintech solutions in collaboration funds to the poor with partners. – Providing access to markets, fair US$ 800 million prices and other value-added X Capacity building programmes services. will be carried out to promote the
[ 73 ] SDGs
Islamic Financial Sector Policy
sDB's Islamic Financial Sector Policy has high-level strategic objectives that guide IsDB’s Iinterventions and investments across all areas of its operations
X Despite its large size and rapid growth, PURPOSE The policy identifies the industry is impeded by several X Islamic finance is a growing segment of Islamic finance challenges. It has struggled to standardise finance that conforms to Shariah (Islamic as an essential and harmonise legal and regulatory jurisprudence). Its mode of operation frameworks across jurisdictions. This has emphasises financial inclusion, which part of the global limited the pool of available Islamic financial fits well with IsDB’s focus on attaining financial system and products in the market as well as the scope development impact and closing the for cross-border, interbank transactions. financing gap for the SDGs in the projects a key platform in it supports. It is a unique form of finance X One of IsDB’s key strategic areas, that attracts a distinct set of investors and closing the global articulated in both the P5P and the 10YS, funders from both the public and private developmental is the development of the Islamic finance sectors globally. funding gap sector. X The Islamic financial sector (IFS) METHOD ecosystem consists not only of Islamic banks, Islamic insurance/takaful, and X IsDB has developed an Islamic Financial Islamic money and capital markets, Sector Policy with high-level strategic but also awqaf and zakat, regulatory, objectives that will guide IsDB interventions supervisory and Shariah bodies/boards. and investments in the IFS in MCs, in line with the P5P, the 10YS and the new business model.
X The policy covers the following IFS interventions: – Technical assistance and advisory activities for developing an Islamic finance enabling environment as well as institutional capacity building – Equity and debt investments in Islamic financial institutions and awqaf – Establishment of Islamic infrastructure institutions – Development of financial products/ funds – Research and training activities – Islamic microfinance to promote financial inclusion.
X Developing the IFS is a core strategic pillar for IsDB. The policy aims to build on this by pinpointing key areas that IsDB will focus on in its interventions and investments in the IFS sector.
X By providing a basis for the development of IsDB’s Strategy and
[ 74 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
policy will strengthen the IFS in MCs, allowing it to better compete with conventional finance in terms of the quality products, institutions and services, thereby catalysing growth and development of their respective real sectors. Overall, it is expected that the market penetration and market share of Islamic finance will grow as a result.
INVESTMENT X As of year-end 2017, Shariah- compliant/ Islamic finance industry assets stood at an estimated US$ 2 trillion, much of which originating from MCs where Islamic banking asset growth outstrips conventional asset growth.
X IFS assets account for a mere 2% of global financial assets while only 14% of the nearly 2 billion Muslim population is estimated to have access to finance.
X In 11 MCs, Islamic finance is systemically important, such that its failure could lead to financial crisis and recession.
X MCs in the Gulf region, MENA (excluding GCC) and Asia have the largest share of the global Islamic finance market.
ISLAMIC FINANCIAL SECTOR ASSETS Guidelines for the IFS, the policy will POTENTIAL IMPACTS serve as a reference document on IFS assets account for a mere prioritising IsDB’s activities in the X The policy will apply to all IsDB sector. fully or partially financed projects, 2% of global financial interventions, programmes and X The policy's objectives include: initiatives relating to the Islamic assets while only 14% – Development of enabling legal, finance sector. governance and regulatory of the nearly 2 billion environments X Projects will be sourced and – Building capacity and technical prioritised based on how well they Muslim population is expertise align to the strategic objectives and – Establishing strategic underlying goals set out by the policy estimated to have access to partnerships document. – Supporting Islamic financial finance institutions and products. X Effective implementation of the
[ 75 ] SDGs
Reverse Linkage Policy
sDB is the only multilateral development institution whose membership is drawn entirely from the developing ISouth . It has been promoting the principles of South-South cooperation since its inception
PURPOSE Reverse Linkage METHOD X Low FDI, intra-OIC trade and technology underlines IsDB’s X In 2017, IsDB approved the RL Policy, diffusion, coupled with rising trade deficit role as a facilitator which is a manifestation of its commitment and global markets volatility, are all to expand support to result-oriented factors that call for repositioning MCs as and coordinator, interventions and to promote connectivity an alternative potential market. There is working with under South-South cooperation (SSC) considerable diversity among IsDB MCs in among MCs. Ultimately, its aim is to help terms of location, per-capita income, size all partners in realise the SDGs. and nature of the national economies. a collaborative X RL can involve both soft and hard X Reverse Linkage (RL) is a scaled-up manner components, including training, provision technical cooperation mechanism that is of expertise, construction and provision of primarily used for capacity development equipment. based on MC-to-MC cooperation (including Muslim communities in non-MCs). It X IsDB's RL Policy adopts the can easily be adopted to undertake any internationally recognised SSC principles, development intervention if there is which include respect of national willingness from at least two MCs, and/ sovereignty, national ownership and or Muslim communities in non-MCs, to independence, equality, non-conditionality, engage in such a cooperation. non-interference in domestic affairs, and mutual benefit.
X The operational elements of IsDB's RL interventions are as follows: – Identification of demand — RL interventions should be demand-driven and clearly address the needs of the recipient MC – Selection of resource centres — Selected by the recipient country, these are institutions in a MC with proven knowledge, expertise, technology and resources. They are the providers of solutions under RL interventions – Formulation of RL interventions — Standalone RL projects and embedded RL components are designed through a peer-to-peer consultation process with the full involvement of both the recipient and provider MCs, in addition to IsDB – Procurement of goods, works and services — All services that can be provided directly by the selected provider resource centre will be directly procured by it. Any service that cannot
[ 76 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
make a contribution, in addition to the transfer of technical expertise. This is to ensure ownership and commitment of all sides. Contributions can be in cash and/or in-kind, subject to IsDB’s clearance. In-kind contributions may include, among others: – Discounted consultancy fees – Intellectual property – Equipment and logistics.
X Contributions of development partners — Other development partners involved in RL interventions are also required to contribute to the project technically and/or financially. If the partner is a development be directly provided by the finance institution, they are required POTENTIAL IMPACTS selected provider resource centre to make a financial contribution. will be procured according to X Through RL, IsDB has become a Partners may also contribute to the guidelines of the partners leader in technical cooperation, and projects by leveraging additional financing these services is facilitating a more holistic, win-win financial resources from within their – Implementation — SSC engagement that also fits within network of donors. The mechanism Implementation of a RL Agenda 2030 and, more particularly, for making such funds available for project starts once related with SDG 17 that demands the RL projects is determined on a case- project agreements are signed revitalisation of global partnerships. by-case basis for each project. with the stakeholders. The provider resource centre leads X For each RL intervention, once X Private sector financial the implementation in close the provider and recipient have contribution — Financial resources coordination with the recipient demonstrated their full commitment that can be acquired from the MC and IsDB. IsDB facilitates the to achieving the mutually agreed private sector for socioeconomic implementation outcomes from the outset, IsDB, development projects are utilised – Monitoring — IsDB monitors the as facilitator, works to support the without any sort of conditionality implementation, in coordination exchange and to ensure its adequate imposed on the recipient. with both the recipient and and timely implementation. provider MCs through a Joint Coordination Committee, among X The connections that IsDB helps other means. This committee is to build among MCs will serve in THE REVERSE LINKAGE POLICY composed of the technical and achieving SDG 17 and will also make financial partners involved in the a positive contribution to achieving RL Policy underlines IsDB’s RL project all of the other SDGs. – Completion — IsDB, in role as a facilitator and coordination with all stakeholders, INVESTMENT undertakes a final review coordinator, supporting of the project results and X Any mode of IsDB financing prepares a joint completion can be used for RL interventions, in development, overcoming report highlighting the outputs, line with IsDB’s financing rules and outcomes and lessons learned at guidelines. obstacles, and working with completion – Knowledge management — The X Recipient and provider all partners in a collective and knowledge and experience gained contributions — One of the core during project implementation features of RL intervention is that all collaborative manner is documented and supplied to stakeholders, including the recipient relevant stakeholders. and the provider, are required to
[ 77 ] SDGs
IsDB-ITFC Sovereign Agriculture Trade Fund
lobal trade of agricultural products has significantly risen over the past four decades . Since G1995, when the World Trade Organization was established, global agri-food trade has more than doubled, reaching US$ 1.5 trillion in 2018.
X The objective of the Fund is to support PURPOSE The Fund will support MCs’ agricultural development through X Although MCs agricultural production the trade of the trade financing, with the aim to: has been relatively small, their agricultural strategic agricultural – Improve the competitiveness of MCs’ exports have increased from US$ 33.5 agricultural commodities and enhance billion (6.7% of global exports) in 1995 to commodities their market share US$ 110 billion (8% of global exports) in identified under – Enhance inter-regional trade among 2016. Imports have also risen from US$ 38 MCs for improved food security billion (7.3% of global imports) to US$ 155 IsDB’s Agriculture – Provide alternative financing for the billion (11.1% of global imports) over the priority agricultural value chains same period. These figures indicate that and Rural identified in IsDB Group MCPSs. MCs are active in global agricultural trade, Development Sector albeit with a small share, more as importers METHOD than exporters. IsDB is now developing a Policy/Strategy and Sovereign Agriculture Trade Fund that will Global Agri-food X Based on the GVC business model, support MCs to increase their shares in the new MCPS 2.0 has been developed agricultural global trade. Industry Report on the principle of “making markets work for development”. This means a greater integration of MCs into GVCs as well as the catalysation of markets to finance projects leading to this integration. Trade is emerging at the beginning and end of the GVCs and is therefore a pivotal segment to unleash the growth of MCs’ participation in global markets.
X The Sovereign Agriculture Trade Fund will invest in agriculture-related trade finance, structured trade and supply chain financing assets of sovereign or semi- sovereign entities.
X The Fund will focus on supporting trade finance of strategic commodities and production inputs (including machinery) where MCs have revealed global comparative advantage.
X In its Global Agri-food Industry Report, IsDB has identified five key priority commodities, namely cocoa, palm oil, rice, fisheries and poultry. In addition, there are several other agricultural commodities of many MCs that are already connected to GVCs, including livestock, wheat, sugarcane,
[ 78 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
X The Fund will be managed by X IsDB is planning to invest in ITFC, with strategic input from an the Fund for an amount of up to investment advisor and a technical US$ 200 million via the usage of the advisor. ITFC will manage the Fund’s Mudarabah line of financing (a form day-to-day operations and maintain of business contract in which one relationships with the investors. It will party brings capital and the other be responsible for deal origination, personal effort), extended to ITFC. structuring and ensuring attainment The investment will lead to sector of returns for the Fund investors. and country diversification and hence enable a more efficient usage X ITFC will delegate part of the of the Mudarabah line. ancillary management services to a regulated third-party asset manager X ITFC will lead the Fund’s resource (ancillary services provider). ITFC mobilisation efforts, as per the will work with the investment and ‘Linkages’ pillar of the P5P. technical advisors to develop a diversified pipeline of projects X IsDB funding (of US$ 200 million aligned with IsDB’s GVC MCPSs maximum) will be proportionate to in target countries. To ensure that achievements in terms of resource all investments are following the mobilisation (working towards the nuts, cotton and vanilla, although principles of Shariah, ITFC will rely on P5P’s Funding pillar): their shares are generally low. the IsDB Shariah Board. – First financial close at US$ 200 million: IsDB (33%), non-IsDB X The Fund will cover the 57 MCs, (66%) ACHIEVEMENTS with a primary focus on developing – Final financial close up to trade links between them and X The Fund will adopt an US$ 1,000 million: IsDB (20%), increasing intra-OIC trade. There are investment strategy that aims to non-IsDB (80%). also opportunities for MCs to export deliver the developmental objectives to non-MCs. outlined in IsDB’s Agriculture and Rural Development Sector Policy/ X The Fund will be registered Strategy. It will also be closely in a jurisdiction acceptable to aligned with the findings and all multilateral institutions and recommendations of the IsDB Global institutional investors and regulated Agri-food Industry Report. ISDB INVESTMENT IN THE FUND by its corresponding financial authority, such as Dubai International X Thresholds have been set in the IsDB plans to invest up to Financial Centre Authority and the investment terms of the Fund in order Financial Conduct Authority in the to achieve development impacts United Kingdom. related to food security (portfolio of US$ 200 million 50% of staple crops and livestock in the Fund X In addition to the standard commodities), local value addition governance structure (board (30% of processed or semi-processed of directors and investment commodities) and improvement of MEMBER COUNTRY EXPORTS committee), the Fund will have productivity and competitiveness an Investor Advisory Committee (20% of inputs including agricultural acting as consultative committee machinery/tractors). Exports increased from representing the Fund investors and responsible for advising and INVESTMENT US$ 33.5 billion approving any material change in the Fund investor Partnership X The investment objective of the in 1995 to Agreement. The Committee will Fund is to maximise risk-adjusted comprise one representative from returns by choosing Shariah- US$ 110 billion each investor holding more than 5% compliant trade finance investments in 2016 of the total fund size, and will meet that are expected to generate low quarterly. volatility and competitive returns.
[ 79 ] SDGs
Enhancing National Ecosystems for South-South and Triangular Cooperation
everaging its experience in RL, IsDB developed the framework of the National Ecosystem for South-South L and Triangular Cooperation which was launched on the side-lines of the 74th session of the United Nations General Assembly in New York, USA in September 2019
in coordination with the United Nations PURPOSE The National Office for South-South Cooperation X Developing countries, including IsDB Ecosystem is a (UNOSSC). It enables the tackling of MCs, undertake South-South and triangular set of institutional economic development holistically through cooperation (SSTrC) in different ways, strategic partnerships as outlined in the using various approaches, institutional arrangements that P5P. It meets the objective of strengthening arrangements, and methodologies at the should help MCs to cooperation among MCs and with the national level. This is influenced by various Global South through more cohesive factors, including existing capacities at the fully benefit from and coordinated efforts. Furthermore, it institutional, organisational and human contributes to achieving SDG 16 (Peace, levels. While much has been achieved and participate Justice and Strong Institutions) and SDG 17 through SSTrC, the pace of improvements in South-South (Partnerships for the Goals). in national institutional frameworks has lagged. This is a constraint for unleashing and triangular METHOD the full potential of SSTrC. cooperation X In order to address this challenge, X The framework of the National SSTrC IsDB, based on its experience in both Ecosystem was developed with the field and analytical work, has developed South Centre and IsDB MCs as well as the framework of the National SSTrC Ecosystem, which identifies the main pillars of an effective national institutional arrangement as: – Political will – A national strategy for SSTrC – A national body that acts as a focal point for SSTrC interventions to enhance national ecosystems in order to achieve Agenda 2030 – Information bases that enable countries to map their capabilities, and development solutions that can be shared with other countries while also identifying issues that can be addressed through SSTrC – Connected actors that coordinate their SSTrC efforts and activities in order to harmonise their interventions as well as amplify the effect of their work – National financing mechanisms that provide the necessary resources for countries to engage in SSTrC regionally and globally
[ 80 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
– Performance management – Designing a comprehensive tool that will be used to identify systems that allow countries to capacity development solution specific capacity gaps in the existing assess how well they are doing to enhance the national SSTrC national ecosystems in MCs. These in their SSTrC engagements ecosystem and implementing it assessments will be conducted and find ways to continuously with the technical partners of the by IsDB in cooperation with other improve. programme. development partners or indirectly by commissioning experts to apply X One of the advantages of the assessment framework. In all ACHIEVEMENTS supporting MCs to establish or cases, the country assessments strengthen their national SSTrC X Through the development of this will be endorsed and owned by ecosystems is that the depth and framework, IsDB contributed to the the MCs themselves through breadth of cooperation in sharing content of the Outcome Document of the relevant authorities of their perspectives and experiences in the Second High-level United Nations respective governments. The country economic development will deepen Conference on SSC (BAPA+40), assessments will then be used in the and improve, not only through which calls for the strengthening of formulation of capacity development an increased inflow of SSTrC national institutional arrangements interventions for strengthening MCs’ (beneficiaries) but also from the in the countries of the Global South national SSTrC ecosystems. outflow (providers) of such sharing in order to develop their capacities to of expertise. engage in SSTrC effectively. INVESTMENT X MCs that have strong national X This framework is recognised XThe Capacity Development ecosystem pillars in place will as IsDB’s contribution to the global Programme for Enhancing National become providers to other countries body of knowledge of SSTrC and SSTrC Ecosystems is set to provide that require capacity development. has been praised globally by various US$ 20 million in grants with By facilitating the exchange of development partners such as the a contribution of US$ 3 million institutional capacity and expertise OECD, the UNOSSC, and the African from IsDB to MCs, with the aim of on SSTrC among MCs as well as Union Development Agency. strengthening their national SSTrC those from the Global South, the ecosystems. The remainder of the framework will contribute to IsDB’s X In 2019, under this framework, funds will be raised from MCs and goal of being a “Bank of Development IsDB initiated interventions that development partners. All beneficiary and Developers”. have started to yield tangible countries will be requested to results. For instance, it established financially contribute to interventions X In order to operationalise the a partnership between the undertaken in their countries as a framework of national SSTrC Tunisian Technical Cooperation sign of commitment and ownership. ecosystems to the benefit of MCs, Agency (ATCT) and the Guinean IsDB has formulated the Capacity Technical Cooperation Agency Development Programme for (AGCT). Through RL, IsDB financed Enhancing MCs’ National SSTrC the recruitment of two Tunisian Ecosystems, which was approved experts to develop the capacity in December 2019. The programme of the AGCT. This partnership led will be implemented using the RL to the preparation and adoption PROGRAMME FOR ENHANCING modality as a key mechanism of of key deliverables such as AGCT NATIONAL SSTrC ECOSYSTEMS implementation. statutes, an organisation chart, administrative and finance manuals Approved with a total budget of X Under this programme, IsDB and AGCT three-year action plan will carry out the following main and operational tools. The statutes activities for each beneficiary of AGCT, prepared thanks to IsDB’s US$ 20 million country including: support, were approved during the as a grant, including a – Assessing the capacity gaps of Council of Ministers meeting in June the national SSTrC ecosystem, 2020. identifying weaknesses as well as US$ 3 million priority areas of intervention, and X In 2020, IsDB developed the contribution from IsDB developing an action plan through Assessment Framework for a participatory approach with the National SSTrC Ecosystems, which national stakeholders is designed as a comprehensive
[ 81 ] SDGs
Building MCs' intellectual property capabilities
ntellectual property (IP) is an area of substantial importance in protecting new technologies and innovative I solutions, fostering science, technology and innovation (STI) and accelerating the transition towards innovation-driven economies
X IP has particular importance for the PURPOSE Building IP operations of the Transform Fund, launched X The primary purpose of building capabilities is by IsDB in 2018 to drive meaningful change IP capabilities is to leapfrog MCs into essential to leapfrog by giving scientists, technologists and innovation-driven economies, while innovators the opportunity to make a providing access to knowledge and MCs into innovation- difference to the world around them. experience, generated and developed by driven economies and with the resources of IsDB. X Protection of IP rights plays an important role in bringing innovative X IsDB has a strong interest in promoting technological change, facilitating economic the generation of IP in the context of growth and enhancing social development. MCs’ efforts to create knowledge-based economies, to support the protection and X IP is a major component of the use of IP rights emerging from projects knowledge-driven operating environment supported by IsDB, and to transfer that of IsDB, as well as the private partnership technology into viable commercial entities. paradigms that IsDB has adopted.
METHOD X In order to build an IP system for IsDB, the first step is to carry out a rough assessment for the current IP model and IP-related regulations. In addition, there is a need to identify IsDB departments, sections and units as well as IsDB-run or funded projects and programmes.
X IsDB is working to ensure that IP can help bring innovative, effective, tailored and cost-effective solutions that each MC can implement. An indirect benefit of such an approach is local job creation as innovation is initiated, funded, developed, protected, manufactured and commoditised within the country.
X IsDB is involved in many activities that have IP-related implications, ranging from financing development activities (socially and economically) to supporting STI. These activities involve both tangible and intangible assets.
X Creating a strong IP system for IsDB is crucial, not only to help maximise
[ 82 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
roles, functions and activities at both IsDB and MC levels.
X A structured programme to promote IP awareness within IsDB has been triggered and online training for STI staff has been initiated. In addition, training will be available for selected staff in other departments of IsDB.
X IsDB organised a joint webinar with WIPO in early 2021. The webinar titled ‘Towards Building a Stronger Innovation Ecosystem by Enhancing Intellectual Property’ was attended by high-level officials, notably IsDB President, Dr Bandar Hajjar, WIPO Director General, Mr Daren Tang, and Senior STI Advisor to IsDB President, Dr Hayat Sindi.
INVESTMENT X IsDB is investing in the success of the programme through various initiatives, including an IP awareness webinar targeting a wider audience in MCs.
X The webinar was scheduled in exploitation of IP, but to protect cooperation with WIPO and featured ACHIEVEMENTS and safeguard IsDB’s intangible high-level speakers. assets. In addition, having an IP X IsDB built a high-level framework system will help IsDB avoid any to start the nucleus of an IP X Key IP stakeholders were invited to potential legal risk that might arise programme which eventually will the webinar, including innovators, IP from unintentionally infringing third build the capability and capacity for official decision makers, universities parties’ IP. managing and administering IP as and research centres in MCs. well as its related aspects. X In 2021, IsDB began cooperating with the World Intellectual Property X The roles and functionalities PROTECTION OF IP RIGHTS Organization (WIPO), targeting of the intended IP programme will innovators on the ground in MCs. extend to IsDB’s MCs. Protection of IP rights The aim is to activate Technology and Innovation Support Centres X The IP unit will mostly focus on is important in bringing which will provide direct support and prompting IP awareness and will help to innovators and entrepreneurs, provide training, workshops and innovative technological including IP official registration, networking. In the future it may be patent search and commercialisation used to secure IP for selected projects. change, facilitating economic assistance. South-South cooperation is one of the activities planned for X Currently, the IP unit is partially growth and enhancing social the WIPO Match initiative, which will functioning and a high-level roadmap allow innovators to share their ideas is being developed. The plans include development with potential investors as well as building the IP Operations and Strategy other interested parties. manual to illustrate the unit structure,
[ 83 ] SDGs
Enhancing the enabling environment for private sector investment
he establishment of a mechanism to settle investment disputes among MCs will stimulate private Tsector investment in countries where IsDB operates
X The OIC has initiated an investment PURPOSE By enhancing the dispute resolution that strongly X IsDB’s new business model focuses on investment climate, complements and contributes to crowding-in more private sector investment the initiative will implementing IsDB’s new business model across the major value chains and critical by providing private sector investors with industries, which should primarily lead to provide a conducive an established forum to resolve investment the creation of more jobs in MCs. environment for disputes. X A prerequisite for effective promotion attracting private X The initiative will enhance the security of FDI in IsDB’s MCs is the existence of an of investments in IsDB’s MCs and reduce enabling legal environment that provides investment to uncertainties in dispute settlement certain protections and guarantees to IsDB MCs, thereby processes, thereby giving more confidence investors. to investors and catalysing more FDI in increasing their MCs. X An example of this kind of enabling capacity to fund and environment is the existence of a X The initiative is also strongly linked to predictable and transparent framework for meet the SDGs the P5P, especially the ‘Linkages’ track. resolving disputes that may arise between In addition, it aligns with one of the key states hosting the investments and private messages under the ‘Awareness’ track investors. of the P5P, given that IsDB is a South- South institution that works to strengthen regional integration and cooperation while harnessing the strength and potential of its MCs.
METHOD X The initiative was originated following two significant events in 2016: – The OIC Forum of Investment Promotion Agencies resolved “to create a permanent body for arbitrating investment disputes among investors or corporate bodies operating in OIC Member States” – Building on the above decision, in a resolution on cooperation in the domain of trade, investment and tourism, the OIC Council of Foreign Ministers (CFM) mandated to propose modalities for the creation of a permanent body for the settlement of disputes arising out of the Agreement for the Promotion, Protection
[ 84 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
X The initiative is in an advanced stage of implementation and has thus far achieved the following outcomes: – Endorsement by the CFM of a Concept Note prepared by IsDB regarding a resolution on intra- OIC trade and investment, tourism and transportation, adopted during its 46th session held in Abu Dhabi in March 2019, setting out a technical proposal for the establishment of a permanent dispute settlement mechanism – Submission of the draft Protocol to the OIC Investment Treaty on Investment Dispute Settlement to the CFM convened in Niamey, Niger, in November 2020.
INVESTMENT X The initiative is creating a favourable climate for future investment in MCs by bringing clarity and predictability to the existing dispute settlement system of the OIC Investment Agreement.
ENHANCING THE ENABLING ENVIRONMENT
The initiative is expected
to enhance IsDB’s position and Guarantee of Investments OIC Secretariat General’s efforts to as a South-South among OIC Member States. establish a permanent mechanism for the settlement of investment institution that works X Based on an official request by disputes. the Secretary General of the OIC, the to strengthen regional President of IsDB agreed to assign ACHIEVEMENTS IsDB’s Legal Division to provide integration and cooperation special technical assistance to the X The main tangible results of OIC General Secretariat towards the initiative include the expected while harnessing the strength implementing the above-stated enhancement of the investment decision of the CFM. climate in MCs, by giving investors and potential of its MCs and MCs hosting them a predictable X Since 2018, IsDB, through its forum to resolve their investment Legal Division, has been leading the disputes.
[ 85 ] SDGs
Maritime Investment Initiative and the blue economy
sDB is utilising maritime investment and the blue economy to leverage the potential of oceans in Isustainable development practices
– The ocean’s contribution to the global PURPOSE IsDB is planning and economy is approximately US$ 2.5 X 90% of the world’s trade is carried providing a wide trillion by sea, the latter being a cornerstone of range of activities to – 90% of global fisheries are at or beyond the global economy, contributing around replenishment capacity US$ 2.5 trillion. create an enabling – The global seafood industry generates environment for 350 million jobs, 10–12% of global X Maritime habitats provide a range of employment commodities that are essential to human Maritime Investment – One billion people rely on fish as the life, including fish, hydrocarbons and primary source of protein in their diet minerals. Initiative and the and 3.2 billion people rely on fish for development of the at least 20% of their animal protein X The facts relating to the maritime consumption dependence of IsDB’s MCs are compelling: blue economy – Shipping carries 90% of global trade. – Of all IsDB’s MCs, 85% are coastal states X The maritime sector faces mounting – All MCs have communities along rivers problems, which present pressing issues and lakes for many MCs, 85% of which have coasts – Aquaculture is the fastest-growing on the ocean or inland seas: segment of the food industry – Climate change is undermining ocean health – Many ecosystems are experiencing impacts from rising ocean temperatures – Ocean acidification and ocean plastic are of major concern.
X In the context of the increasing level of crisis these countries are likely to encounter or may already face, IsDB is exploring the maritime investment market, with the goal of establishing a Maritime Investment Fund.
X Any Maritime Investment Initiative (MII) supported by IsDB would have the potential to meet identified needs among those MCs located in coastal zones that are affected by exposure to adverse impacts.
X While maritime industries remain undercapitalised due to risks perceived by commercial investors and the lack of targeted financial instruments, an MII could provide an opportunity for IsDB to provide leadership for new investors in the sector.
[ 86 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
– RCI Grant programme to benefit 25 landlocked MCs with no access to maritime routes; the project involves 2,200 senior officials and experts.
X A technical assistance grant amounting to US$ 300,000 has been developed to support a capacity-building programme for the aquaculture sector in Morocco.
INVESTMENT X Through MII partnerships, IsDB hopes to leverage emerging opportunities from the ocean, which is estimated to have the potential of contributing about US$ 2.5 trillion to the global economy.
countries and, to a lesser METHOD GLOBAL TRADE extent, low- and middle-income X Through an appropriately targeted countries, as IsDB will be able MII, IsDB will be able to help MCs to to use its poverty-reduction Shipping carries 90% invest in both large- and small-scale mandate to bring Blue Economy maritime projects using Islamic investing to those countries that of global trade finance. The characteristics of the are left out planned MII are as follows: – To enable formally underserved GLOBAL SEAFOOD INDUSTRY economies to tackle their maritime X Branded ‘Building the Base of the challenges, IsDB can deploy a full Blue Economy’ and partly modelled range of services from all the IsDB 350 million jobs, on the Transform Fund, the Maritime Group’s departments Investment Fund will have global – Investments can leverage 10–12% of global ambition and reach, working across partnerships with external the entire IsDB portfolio with a stakeholders including impact employment particular focus on least-developed investors, philanthropic MCs. organisations and commercial PROTEIN VALUE investors. X It will invest in a range of Blue Economy activities, including 1 billion people rely on ACHIEVEMENTS aquaculture and seafood, maritime fish as the primary source of logistics, offshore energy, marine X Several MII projects have already science and tourism. been introduced, including: protein in their diet and – Blue Economy investing policy X Significant capital will be to guide current and future Blue 3.2 billion people committed to address these Economy investment activities problems and adapt ocean industries across IsDB rely on fish for at least so that they work more effectively. – Investment agreements currently being developed with international 20% of their animal X There are several potential investors and funds benefits of an MII: – MoU with the Republic of Senegal protein consumption – Investment funds can benefit for Maritime Investment and the more people outside of developed Blue Economy
[ 87 ] SDGs
Harnessing private sector solutions through Reverse Linkage
L is a technical cooperation mechanism enabled by IsDB whereby MCs exchange their knowledge, Rexpertise, technology and resources to develop their capacities and devise solutions for their autonomous development
PURPOSE During the last METHOD X In the spirit of engagement in SSTrC, couple of years, X IsDB uses its mapping methodology RL has evolved into a modality that has IsDB, through for resource centres to identify partners welcomed the participation of the private from the public, private and third sectors. sector from both MCs and non-MCs. RL, connected These resource centres are developers 31 MCs to share and companies that have proven X IsDB MCs and the Global South expertise and know-how in key areas of have a wealth of untapped know-how, their development development. IsDB also engages directly expertise and resources in the public and solutions in many in dialogue with the private sector in private sectors that can be used to solve MCs and non-MCs to explore potential development challenges if harnessed in sectors, including collaboration under RL. an effective manner. IsDB’s new strategic renewable energy, orientation, as outlined in the P5P, calls for health, education X Among the tools available to IsDB to market-driven development, which implies engage the private sector is a new form a bigger role for the private sector. and agriculture of RL mechanism, which can be used to mobilise private sector resources to boost development while promoting cooperation among MCs and with the Global South. Engaging the private sector in socioeconomic development is key in order to benefit from the vast financial resources and high-quality technical expertise as well as more agile implementation mechanisms. This engagement is aligned with SDG 17 (Partnerships for the Goals), SDG 3 (Good Health and Well-being), SDG 4 (Quality Education), SDG 8 (Decent Work and Economic Growth), and SDG 13 (Climate Action).
X To ensure fruitful collaboration with the private sector, the win-win arrangement feature of the RL mechanism is applied. Tangible benefits for the private sector as a provider of knowledge and the recipient stakeholders are ensured from the design stage. Among the benefits for the private sector are market access to MCs, international positioning and branding, business risk mitigation, and new revenue streams.
[ 88 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
X Also in 2020, Serba Dinamik Holding Berhad from Malaysia donated a pandemic response package worth US$ 2.25 million in support of IsDB’s COVID-19 Strategic Preparedness and Response Programme. This reflects the importance of its relationship with IsDB and its substantive contribution towards development. In September 2020, Serba, in partnership with IsDB, deployed US$ 550,000 of this donation to Guinea and Senegal. Serba also sent a consignment of critical medical personal protective equipment from Malaysia to both countries via airfreight to be distributed locally.
X These examples demonstrate how RL is paving the way for a new generation of active and socially responsible private companies willing to directly partner with MDBs such X In 2020, IsDB continued its as IsDB, to increase the positive ACHIEVEMENTS engagement with the private sector impact of development activities to X In 2019, IsDB, for the first and received pledges of up to improve the quality of life of people in time, opened a new avenue of US$ 88.6 million for RL. MCs. collaboration with the private sector by leveraging its RL X During the year, a particular mechanism, which culminated highlight was the expansion of the in the establishment of funding network of developers outside MCs. mechanisms with a total financial IsDB, through RL, partnered with the contribution of US$ 45 million for private sector from Singapore for the MCs. IsDB signed an agreement first time. with Serba Dinamik Group Berhad, PRIVATE SECTOR PLEDGES an energy sector private company in INVESTMENT Malaysia, to set up a US$ 30 million A total of RL Fund that provides financial and X Partnership with the private technical resources to help MCs to sector through RL has yielded establish vocational training centres tangible interventions for MCs. In US$ 133.6 million in the oil and gas sector that could 2020, during the COVID-19 crisis, mobilised and pledged from boost employment, among other Jordan benefited from the transfer benefits. of expertise and technology from the private sector for RL in Singapore. PATEC Pte Ltd (Singapore) X During the same year, IsDB will support King Abdallah II Design 2019 and 2020 signed an agreement with Warisan and Development Bureau in order to Quantum Management, a Malaysian develop their capacity in producing Shariah-compliant private equity N95 masks by providing a turnkey management company, to allocate solution. This solution transfer will RL CONNECTIONS US$ 15 million to a RL Fund that enable Jordan to be self-sufficient supports Malaysian SMEs interested in producing personal protective MCs connected in participating in RL activities and in equipment and also to export it 31 potential business opportunities as a to other MCs, strengthening the result of RL projects. country’s pharmaceutical industry.
[ 89 ] SDGs
Institutionalising economic empowerment methodology
conomic empowerment is at the heart of the P5P and addresses some of the major E challenges faced by IsDB’s MCs
– Build partnerships with the private PURPOSE IsDB’s economic sector and other development players X As one of the key mechanisms for empowerment for win-win relationships. the implementation of the P5P, IsDB’s approach aims to economic empowerment approach will: X To achieve these aims, IsDB has set up – Act as a catalyst for supporting pro-poor provide economic a new economic empowerment function markets — interventions are triggered opportunities to the to mainstream economic empowerment with the identification of economic/ in all its MCs. In particular, it promotes a strategic partners (value-chain leaders) poor by providing paradigm shift from financial inclusion to and create the right conditions for these economic inclusion. entities to act as market developers for financial and non- the benefit of the poor financial solutions METHOD – Promote new developmental thinking, changing the way of thinking of to help them in their X Economic empowerment initiatives beneficiaries from relying on aid to self- journey towards a are developed through the creation of reliance funds, programmes and institutions. IsDB – Take a comprehensive dimension better life will establish and manage economic by including capacity building and empowerment funds initiated by itself or the development of the supportive proposed by various stakeholders. It may regulatory and institutional structure provide equity or other modes of financing to economic empowerment institutions created by it or by other stakeholders.
X Programmes will be developed to include a line of finance and capacity building in collaboration with internal or external stakeholders.
X Building smart partnerships is a key pillar of the economic empowerment approach. Consequently, IsDB has actively engaged with several partners on different fronts to establish solid long-term relationships that will facilitate the rapid expansion of the pipeline of initiatives. These partnerships involve the signing of memorandums of understanding as a first step.
ACHIEVEMENTS X To date, IsDB’s efforts have led to the following outcomes: – As part of the SPRP, the SERVE Programme was developed to provide immediate and targeted cash flow support to businesses that are
[ 90 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
(EED)is monitoring eight Islamic microfinance projects and four MOBILISATION EFFORTS Islamic microfinance institutions GENERATING RESULTS – Development of a roadmap for Solutions Engineering EED has successfully Entrepreneurial Design, aimed at developing a conducive mobilised more than ecosystem for economic empowerment though knowledge generation and transfer of US$ 450 million tools, policies, best practices, overachieving the 2020 target adversely impacted by COVID-19 capacity building activities and as well as to sustain their the application of technology for business operations beyond the developing the capacity of partner of US$ 50 million crisis. To date, SERVE projects financial institutions for Palestine, Jordan and Djibouti – Representing IsDB in the G20 have been launched. Global Partnership for Financial – The institutional infrastructure Inclusion (GPFI), thus contributing US$ 80 million was set up, including the transfer to several policy documents and was mobilised for the EEFPP, of microfinance projects, policy recommendations leading establishment of the Economic IsDB to secure a permanent Empowerment Operations seat at the G20 GPFI as an US$ 327 million Management Committee, implementing partner. from partners under the delegation of authority and business processes. INVESTMENT SERVE Programme and X Other achievements include: X IsDB has already developed a – Launching and implementing the rich pipeline of projects, including a US$ 43 million Economic Empowerment Fund portfolio of more than 20 initiatives for from other economic for Palestinian People (EEFPP), programmes, funds and institutions, Bouchra Microfinance Institution amounting to potential investments of empowerment programmes in Senegal and SERVE Djibouti. more than US$ 300 million, expected In addition, IsDB’s Economic to mobilise an estimated US$ 2.9 Empowerment Department billion of investments.
[ 91 ] SDGs
Strengthening the economic resilience of vulnerable enterprises in response to COVID-19
new programme provides immediate and targeted cash-flow support to MSMEs that are adversely A impacted by COVID-19, while helping to sustain their business operations beyond the crisis
PURPOSE The COVID-19 METHOD X The average number of MSMEs per pandemic is X The main goal of the Programme is to 1,000 people in IsDB MCs is 53.2. This is exacerbating already design a support package targeting MSMEs more than double the world average of in IsDB’s priority MCs, designated according 25.2. high unemployment to IsDB’s prioritisation and selection tool. rates and poverty X Lockdowns that are taking place globally X This aligns with the objectives of IsDB’s are putting an enormous strain on MSMEs in IsDB MCs. The SPRP approved in March 2020 and is in various sectors, with many having been consistent with the ‘Restore’ track of the forced to close their businesses during this SERVE Programme SPRP, which covers medium-term action by period. is providing much- financing trade and MSMEs to: – Sustain activity in core strategic value X IsDB has set up SERVE to help provide needed support chains MSMEs in IsDB MCs with much-needed – Ensure continuity of supplies, mainly to liquidity to survive this difficult period. the health and food sectors.
X The Programme is in line with the X Concessional financing provided by mandate of poverty alleviation of IsDB’s ISFD will reduce the cost of financing for ISFD and is part of ISFD’s support to IsDB’s Islamic microfinance institutions. ISFD has COVID-19 response. also been actively engaging partners such as SPARK and Silatech to collaborate with IsDB on projects that will be approved under the Programme. This will further enhance the leverage ratio of IsDB/ISFD resources that will be pledged under SERVE.
X A line of finance will be provided to Islamic microfinance institutions. Concessional resources (IsDB loans and ISFD loans) will be channelled through the government of each country in US dollars. The direct borrower of the sovereign loan will be responsible to repay IsDB, which will on-lend to the selected Islamic microfinance institution(s) in the equivalent local currency so that the currency exchange risk will be borne by the government.
X The on-lending agreements will transfer the same terms of financing provided by IsDB/ISFD to the Islamic microfinance institution.
[ 92 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
Djibouti, Jordan and Palestine, with a fourth project planned for Morocco.
X The four projects are expected to protect and create at least 107,000 jobs in total.
X The financing has the potential to achieve results beyond the initial beneficiaries, as it may be used to support the financial partners of IsDB Group entities as well as equity investees of IsDB Group and its entities and may also be used to leverage partners and donors.
INVESTMENT X The SERVE Programme was approved by ISFD in September 2020, mobilising US$ 120 million from IsDB Group.
X IsDB has made a total commitment of US$ 83.30 million X Selected microfinance institutions (including partner financial and a further commitment of are expected to match the funding institutions of IsDB Group). US$ 327 million has been mobilised provided by IsDB and ISFD. They from governments and financial will deposit the matching funds X SERVE is based on global institution counterparts. into a dedicated account which will benchmarks and best practices in be used to finance clients meeting order to support governments’ efforts X The first disbursement has the criteria specified by IsDB. They in curbing the impact of COVID-19 already been made in Djibouti. are also expected to provide non- on their economies. It will contribute financial assistance to ensure that to sustaining current and future their clients will have the capacity to working capital requirements, funding better utilise their financing. innovation and adaptation of MSMEs’ business operations to mitigate the X The Islamic microfinance impacts of the pandemic. SERVE PROGRAMME institution will then on-lend the financing to its clients using Shariah- ACHIEVEMENTS The Programme is expected compliant modes of financing (Murabaha, Salam, etc.). IsDB will X The SERVE Programme is already to create or maintain make no objection to the financial addressing the profound impacts product to ensure that: of the COVID-19 pandemic on the 314,000 jobs by – The proposed products are socioeconomic conditions of MSMEs suitable to the needs of targeted in MCs. financing more than MSMEs – The pricing is justified X The IsDB/ISFD support to 150,000 MSMEs – Clients will benefit from the provide liquidity to partner financial concessional loans provided by institutions will strengthen through a package of IsDB. their resilience and that of their beneficiary MSMEs. X Similarly, a line of finance will be US$ 240 million extended to Islamic banks and public X By the end of 2020, SERVE and private financial institutions projects had been approved in
[ 93 ] SDGs
Bridge Platform: establishing a global network of financial institutions
he Bridge Platform is a dedicated online resource that brings together Tfinancial institutions in its MCs
X Through the Bridge Platform initiative, PURPOSE The aim of the ICD aims to accelerate knowledge X Financial technology (fintech) is a Bridge Platform is sharing, market assessments and specific revolutionary set of technologies used to enable ICD, as deals that will boost national economic by financial institutions (FIs) to improve development and strengthen the capacity and automate the delivery of services by a member of IsDB of the private sector to support financing of helping companies, business owners and Group, to play a SMEs. consumers better manage their financial operations, processes and lives. more competitive X The platform aims to: – Facilitate information sharing among X Amid the COVID-19 pandemic, FI have and responsive role member FIs been forced to expedite their digitalisation in meeting the needs – Enhance market and business efforts to meet new and growing demands. intelligence analysis of IsDB's MCs – Enable open access to fintech resources X Against this backdrop, one of IsDB and cloud services Group’s private sector entities, the Islamic – Reduce financial transaction costs for Corporation for the Development of member FIs the Private Sector (ICD), is working to – Upgrade advisory services that ICD strengthen its FI global network through a offers to its partners across the Islamic dedicated digital platform. The intention is developmental network by applying to improve connectivity and commercial fintech technologies. interaction between the Group’s FIs. X Using technology that connects FIs, the platform will achieve the following results that feed into the P5P: – The platform will serve as an integrated communication channel for all MCs and will consequently increase IsDB visibility – The platform will help to build partnerships in MCs and enable FIs in MCs to access the latest technological products – By sharing data on the platform, FIs will obtain the knowledge necessary to identify the real problems and difficulties and then explore possible solutions and business opportunities – By enabling FIs to communicate and explore opportunities, the platform will help them to expand financing to other MCs – Digitalisation of communications, information sharing, crowdsourcing and
[ 94 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
ACHIEVEMENTS X The Bridge Platform is composed of three main phases: – Phase 1: Information sharing and communications – Phase 2: Business and market intelligence services, standardisation of services and matchmaking with investment opportunity identification – Phase 3: Commercial transactions and global marketplace exchange, with a range of Islamic financial products such as sukuk, mortgages, takaful, direct investments, SME financing, MBS, and robotic advisory.
transactions will ensure speedy – Asset management products to X Phase 1 was successfully project implementation in MCs be sold through the platform after completed in 2020 with a network – The platform will encourage FIs to regulatory approvals of more than 88 FIs and 12 leasing adopt solutions and policies that – Treasury operations to serve all companies worldwide entitled to ensure sustainable development 100 participating FIs register on the platform. in MCs. – Sharing of information in relation to mutually beneficial private X A trial version of the deal-flow sector projects and business testing was also launched before the METHOD opportunities in MCs (via official launch of phases 2 and 3. X The platform will enable the matchmaking) following areas of activity between – Managing big data through the INVESTMENT Islamic banks, takaful companies, platform to allow the reporting of leasing companies and microfinance information to flow back to ICD so X The Bridge Platform has been institutions: that its investments and financing funded internally by ICD as one of – Collaboration and facilitation will improve as a result the main initiatives to be adopted for activities including cross – Maintaining the privacy of all as a means for it to contribute to selling and sourcing syndication, data shared through the platform the digital transformation journey of term finance, advisory, sukuk to ensure fairness and avoid IsDB’s partner FIs. transactions, line of financing, any conflict of interest between asset management, PPP, equity, participating FIs. dealing in treasury and financial market instruments, and other X Registration of interested FIs for THE BRIDGE PLATFORM transactions of mutual interest free on ICD’s website with a choice of – Provision of advisory services and two types of membership: Phase 1 was successfully best practices for SME financing – Standard — Free and open to (for example) all FIs. This section consists of completed in 2020, with a – Provision of online training — articles and resources of Islamic Islamic finance, takaful, sound financing tools and techniques network of more than 88 FIs financial management, treasury plus a CEO Club where CEOs can management and impact of network for support, advice and and 12 leasing companies economic data on financial mentoring worldwide entitled to register markets – Gold — FIs can register for a – Mortgage business with fintech modest annual fee and join the on the platform servicing (mortgage-backed global network of over 100 FIs for securities (MBS)) information and deal sharing.
[ 95 ] SDGs
Arab-Africa Trade Bridges Programme
major trade initiative geared towards increasing economic integration and supporting A sustainable growth across Arab and African countries
54 out of 55 states in the African Union PURPOSE Arab and African had joined AfCFTA, which requires removal X Although the Arab and Africa regions countries can benefit of up to 90% of members’ trade tariffs, are experiencing significant economic from the activities of and significant reductions in Non-Tariff growth, there remains untapped potential Boundaries within the continent. to further develop regional trade, which will the AATB Programme produce continuous economic growth and in developing trade X An important benefit of the AATB employment for both regions. Programme is its potential to reduce and investment, participating economies’ dependence X IsDB launched the Arab-Africa Trade especially in value- on commodity exports. By promoting Bridges (AATB) Programme in February growth that increases exports of higher 2017 to address some of the challenges adding sectors that value-added and less volatile products, the faced in promoting trade and investment rely on a more highly positive effects of trade can be enhanced, between the two regions and developing supporting sustainable and inclusive inter-regional business partnerships. skilled workforce and economic growth. that can promote X The AATB Programme benefits from the X By catalysing growth in trade and existence of the African Continental Free greater investment investment where volumes are currently Trade Area (AfCFTA), one of the world’s and knowledge low, the AATB Programme is a high-impact largest initiatives for increasing both inter- tool to contribute to achieving higher and intra-continental trade. As of July 2019, diffusion economic integration through trade and investment.
METHOD X The AATB Programme is a multi-donor, multi-country and multi-organisation initiative, aiming to: – Promote and increase trade and investment flows between all Arab and African countries – Provide and support trade finance and export credit insurance – Enhance existing capacity building tools relating to trade.
X The programme is geared towards increasing economic integration and supporting sustainable growth across Arab and African countries. Specifically, trade promotion efforts focus on sectors where significant added value is created, especially in industries that rely on a more highly skilled workforce and those which can promote greater investment and knowledge diffusion.
[ 96 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
X Based on the current economic targeting products with high with comprehensive information landscape in the target countries, added value about soil nutrients with the the primary sectors where this – Increasing the competitiveness of aim of directing them towards programme’s impact will be felt the exports by controlling the cost of technology-based agriculture most are: production practices. Other countries in West – Manufacturing – Removing obstacles and Africa are also considering similar – Agricultural inputs providing solutions for payments, programmes – Health and pharmaceutical. shipping and the competitiveness – A training course on regional of Arab-African trade. and world trade for the benefit X The programme focuses on of OIC African French-speaking designing and carrying out projects MCs, organised with ITFC in ACHIEVEMENTS and activities that: cooperation with the Kingdom – Promote economic integration X Exporters’ and importers’ of Morocco and the Moroccan among Arab and African meetings initiated by the AATB Higher Institute of Commerce and countries Programme aim to link exporters and Business Administration (ISCAE). – Maximise and increase importers directly to strengthen trade investment and trade partnerships in the private sector. In INVESTMENT opportunities in prioritised this context, several meetings were sectors. held, including in the pharmaceutical X The Governing Board of the sector in the Arab Republic of Egypt, AATB Programme consists of the X It achieves these objectives Côte d’Ivoire and Senegal; and in the founding members. Continuing through the following activities: food sector in the Arab Republic of investment is secured by inviting – New business partnerships Egypt and the United Arab Emirates. other countries and financial or – Higher trade and investment business corporations to join through between Arab and African X The meetings saw active a financial contribution of at least countries participation from the private US$ 500,000 to the Programme’s – Greater public information about sector from 18 African and 10 3-year operational plan. market creation efforts Arab countries. The value of the – A visible platform for traders to transactions discussed during market their exports these activities amounted to about – Increased communication US$ 250 million (US$ 190 million between businesses located in for pharmaceutical materials and Arab and African countries accessories and up to US$ 40 million – Development of new logistics in foodstuffs). platforms – Growth in trade finance and X Two business-matching business- AATB EXPORTERS’ AND export credit insurance from to-business (B2B) meetings in 2019 IMPORTERS’ MEETINGS public and private sector yielded the following results: institutions. – An agri-food products event in The meetings saw active Dubai, UAE hosted over 1,620 B2B X The programme supports the meetings between importers and participation by the private activities of the private sector from exporters and led to 120 deals both regions in order to create under negotiations, generating sector from 18 African and opportunities for business owners US$ 10 million to meet and identify potential – An event for pharmaceutical 10 Arab countries. The value investments. In the coming years, products and related industries it will also give special attention to hosted 602 meetings and 108 of the transactions discussed achieving the following objectives: deals were negotiated for a value – Establishing value-chain projects of around US$ 41 million. amounted to about to enhance access to the markets of African and Arab countries X Training and education events – Developing skills in the digital have also been held, including: US$ 250 million economy – An initiative launched in Senegal – Increasing the efficiency and in 2019 to transform agriculture effectiveness of countries in by providing nearly 5,000 farmers
[ 97 ] SDGs
West African SMEs
sDB is helping to reduce the gap between SMEs’ abilities and their trade finance Irequirements through capacity building and better assessment tools
– Capacity development for selected PURPOSE SMEs are identified SMEs SMEs represent 90% of businesses in based on predefined – Capacity building and SME assessment West Africa and provide 80% of private criteria relating tools for the partner banks sector jobs. Within the West African – Line of trade finance to partner banks Economic and Monetary Union (WAEMU) to business and – Support for successful SMEs in the zone, they are one of the main vectors of organisational submission process of their bankable economic and social progress. projects. readiness, 20% X However, organisational problems, METHOD compounded by difficulties in structuring, being reserved low levels of training and limited financial for women-led X The programme, which was launched in capacity, mean that SMEs struggle to 2018, aims to reduce the trade finance gap convince FIs of their creditworthiness. enterprises for SMEs in the region.
X An important area of intervention for X It provides financing lines, capacity ITFC, one of IsDB Group’s private sector building and advisory services to partner entities, is to provide support for SMEs in banks and SMEs within the WAEMU zone, their efforts to engage in the economy. which includes Benin, Burkina Faso, Côte To this end, it has established the US$ 18 d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal million West Africa SMEs Programme, and Togo. which has four components: X The overall aim is to enhance the capacity of selected SMEs and partner banks to achieve a better approval rate and to improve the utilisation rate of lines of finance placed at partner banks.
X Given the programme’s regional reach, it was important for ITFC to select local partners who share the same objectives and scope. Coris Bank International (CBI) was selected as a key partner for two pilots of the programme, in Burkina Faso and in Senegal, thanks to its strong presence in the region. – In Burkina Faso, the Maison de l’Entreprise organised five training modules for SMEs and also reviewed and resubmitted their projects to CBI – In Senegal, where support focused on capacity building, a partnership was set up between the Delegation for Rapid Entrepreneurship, Organisation Internationale de la Francophonie and CBI.
[ 98 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
X The Senegal pilot’s aims include: – Selection and training of up to 200 SMEs in 2020 and 2021 – Support for successful SMEs and resubmitting applications for financing – Obtaining financing for 25% of resubmitted applications – Launch of the banking component with CBI Senegal.
INVESTMENT X IsDB’s investment in developing SMEs is paying dividends, in particular through pilot projects launched by the programme. For example, the outcomes of the Burkina Faso pilot project include: – US$ 8 million trade finance line granted to CBI – 60 SMEs selected from CBI rejection portfolio – 22 SMEs shortlisted and trained, and credit applications resubmitted – Financing received for 35% of trained SMEs with resubmitted applications – US$ 1 million financing from CBI approved for SMEs – US$ 300,000 in credit currently under appraisal – SME assessment tool developed for CBI between Q1 and Q3 of X Through a combination of – Support successful SMEs 2020. instruments specific to each of these and resubmit applications for agencies — debt, guarantee, equity financing and grant — ITFC expects to increase – Achieve successful resubmission BURKINA FASO PILOT the funding envelope available for of 25% of applications to obtain SMEs while reducing the cost. financing After these two successful pilots, – Launch the banking component US$ 8 million the programme will launch in Côte with CBI Burkina Faso. trade finance line granted d’Ivoire. X For the Senegal pilot in November to CBI 2019, approximately 100 SMEs, ACHIEVEMENTS including several led by women, X The Burkina Faso pilot, which were selected based on a list of pre spanned eight months in 2018, approved criteria, such as the overall aimed to: maturity level of the project. US$ 1 million – Provide a line of finance to CBI in financing from CBI Burkina Faso X Up to 200 multisector Senegalese – Select and train up to 25 SMEs SMEs will be selected by the partners approved for SMEs that were previously rejected by to undergo a 15-month-long pilot CBI programme.
[ 99 ] SDGs
Enhancing private sector resilience through the BRAVE Programme
he aim of IsDB’s programme “Business Resilience Assistance for Value-Adding Enterprises” T (BRAVE) and BRAVE Women Programme is to strengthen the private sector as an engine of sustainable growth despite ongoing conflict
sectors such as agribusiness, fisheries, PURPOSE The BRAVE healthcare and textiles. Partners have X The BRAVE Programme was designed Programme and worked in close consultation with the Yemini in 2016 by ICD in partnership with IsDB. The BRAVE Women Ministry of Planning and International BRAVE Women Programme grew out of Cooperation, the Small and Micro Enterprise this initiative to address the specific needs Programme have Promotion Service (SMEPS), an affiliate of women. helped to bring agency of the Social Fund for Development, and three leading local FIs. X Both Programmes invest in business jobs and stability to resilience and business continuity X The aim of the BRAVE Women initiatives within an integrated framework communities at risk Programme is to address the special to help enterprises manage risk against and cemented the challenges faced by women-led small and the impact of ongoing conflict and develop medium-sized enterprises in the developing crisis mitigation strategies. important role of world, which are often unable to obtain the the private sector in financial services they need to start and X The aim of the BRAVE Programme is to run businesses. enhance private sector resilience in Yemen fragile and conflict- as an engine of sustainable growth, focusing afflicted countries METHOD on MSMEs in pro-poor/ value-adding X The BRAVE Programme consists of three components: – Providing business resilience capacity building – Providing business recovery support to selected firms with a matching-grant scheme, to be invested primarily in capital goods needed by the business – Strengthening value-chain resilience for target sectors and help leading firms adjust, upgrade or enhance their business models for the new market structure, through a tailored matching- grant scheme.
X The first phase of the programme (2017–2018) provided Yemeni firms with much-needed business continuity training to respond to the challenges facing the private sector. Selected firms also benefited from the matching-grant scheme, which was deployed in coordination with local banks.
[ 100 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
INVESTMENT X A total of US$ 6.0 million was raised for the BRAVE Programme from the MENA Transition Fund, which was established in 2012 at the request of the Deauville Partnership with Arab Countries in Transition. The second phase of the BRAVE Programme started in 2019 with additional US$ 3.0 million in funding from the MENA Transition Fund.
X The BRAVE Women Programme is fully funded by We-Fi, with a US$ 32.2 million multi-country allocation under the first round of applications for projects in Yemen, Nigeria and Burkina Faso. We-Fi partners include 14 donor governments, six MDBs as implementing partners, and numerous other stakeholders in the public and private sector around the world.
X IsDB Group is one of the designated implementing partners of the We-Fi fund, while ICD X The BRAVE Women Programme help 1,200 to qualify for combined provides technical support for was established in 2018 and formally grant matching support and the implementation of the BRAVE launched in February 2019 in Yemen technical assistance. Programme, in close collaboration with plans to extend to Nigeria and with SMEPS as the executing agency Burkina Faso. Comprising a five-year in Yemen, which is the pilot country ACHIEVEMENTS grant awarded under the Women for the programme. Yemen was Entrepreneurs Finance Initiative X The BRAVE Programme has so awarded US$ 8.8 million of the total (We-Fi), it focuses on addressing far achieved the following outcomes: grant. barriers to women entrepreneurship – 620 firms have been provided in selected value chains in Yemen, with business continuity training Nigeria, and Burkina Faso. – 348 firms have benefited from a THE BRAVE PROGRAMME matching-grant scheme X The funding provided for the – 15,000 jobs have been sustained, 620 firms provided with BRAVE Women Programme is from with 1,541 new jobs created. external grant resources aimed business continuity training, at unlocking the entrepreneurship X The BRAVE Women Programme’s potential of women. The Women Yemen project started in February 348 firms benefited from and Youth Empowerment Unit is 2019 and made progress in improving leading IsDB’s engagement in We-Fi. capacity development in the Sanaa, a matching-grant scheme, The programme is managed by ICD Aden, Ibb, Hadramout and Taiz Industry and Business Environment provinces of Yemen. In April 2020, 15,000 jobs sustained, Support team. the Nigeria project got underway with plans to provide employment to and 1,541 new jobs X The BRAVE Women Programme 1,000 women and skills development aims to reach around 1,500 to 600 women, with the Nigerian created women-owned and -led SMEs with Bank of Industry Ltd taking on the specialised business training and to role of local implementing agency.
[ 101 ] SDGs
Awqaf Properties Investment Fund
sDB’s Awqaf Properties Investment Fund supports MCs by participating in the financing of Iprojects for the development of awqaf land and properties
X In helping organisations that wish to PURPOSE The Fund undertakes develop current Waqf land, renovate their X The Awqaf Properties Investment Fund studies to ascertain Waqf property, or purchase property to (APIF) aims at investing, in accordance the feasibility and be used as Waqf, APIF presents a unique with the principles of Shariah, in waqfi (i.e. model in the development world, with subject to Waqf or ‘endowment’) real-estate technical, financial, its focus on financing endowments. It properties in MCs and other countries. economic and has expanded to include promoting the establishment of new endowments, with a X The Fund participates in operations and Shariah soundness focus on intergenerational sustainability. projects that have the potential to appreciate in value and/or whose returns could of the projects X In the short term, APIF supports NGOs increase in the short, medium and long run. selected for and local charitable organisations and aids them in their search for sustainable X As an impact investment fund with 15 investment, as well income. In the long term, it serves to grow institutional investors, APIF fills gaps in as the chances of social wealth via encouraging philanthropic the financing needed to achieve the SDGs. giving and diverting domestic savings to APIF’s reach, visibility and model have realising a good serve society. transformed and risen in prominence over return to Awqaf the past few years, with many innovative METHOD initiatives. X APIF aims at increasing its total returns X Through its mandate of establishing to the maximum level possible, which is and developing real estate endowments achieved through long-term financing and using awqaf, APIF provides local welfare by using one of the customary Islamic institutions and civil society organisations modes of financing, such as Ijarah, with sustainable sources of income, which instalment sale, Istisna’, diminishing allow them to make their own development participation, or equity participation. decisions. X To ensure the competitiveness of APIF’s financing conditions with those offered by other competitors, returns on such modes of financing are considered by using the customary indicators as guidelines, in addition to a profit margin to be determined in accordance with the period of financing and its underlying risks. Since the Fund is managed by IsDB, it offers the tax exemptions IsDB enjoys in its MCs.
X With a financial contribution of at least 25% of the total project cost or a suitable plot of land (for a greenfield project) provided by the beneficiary, APIF finances the construction, renovation and/ or purchase of an income-generating real- estate asset. The minimum contribution
[ 102 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
and an extensive exercise to collect, categorise and analyse the impact of APIF interventions, culminating in the APIF Impact Publication.
X APIF has continued to support some of its most successful previous beneficiaries, such as the Mutawalli Committee (Board of Trustees) of the IsDB-Bangladesh Islamic Solidarity Education Waqf (IsDB-BISEW). New financing was approved for the second phase of this Waqf in 2019.
INVESTMENT X As of December 2020, there are 16 participants in APIF, comprising IsDB, Awqaf ministries, Awqaf organisations, non-profit organisations and Islamic banks, with a total paid-up capital of US$ 88.5 million. Moreover, IsDB has extended a US$ 100 million line of financing to APIF to be utilised for the financing of APIF’s projects. requirement means that APIF ACHIEVEMENTS financing often acts as a catalyst to X In 2020, IsDB approved an increase philanthropic giving, as local X So far, APIF has successfully increase in APIF’s authorised capital and international donors step up to supported 57 projects with broad from US$ 100 million to US$ 500 fill the gap. impacts on individuals, communities million. and organisations, with a total value X Typically, a project is designed of US$ 1.21 billion, in 29 MCs and in such a way that the repayments non-MCs. AWQAF PROPERTIES on APIF financing are made entirely INVESTMENT FUND from the income of the project X APIF has embarked on a range itself, ideally with a significant of innovative initiatives, including APIF has so far supported amount remaining to support the conducting a full review of its model beneficiary’s activities during the to transform/revamp it as necessary. 57 projects repayment period. After the financing is repaid, all income generated goes X The APIF model has been with a total value of to support the beneficiary’s activities repackaged as a unique contribution in perpetuity. APIF resources not of IsDB to the development world, US$ 1.21 billion needed urgently are invested, taking and a sensitisation campaign into account generally accepted risk is underway among various in 29 MCs and non-MCs management principles. development institutions and potential partners. X In its capacity as Mudarib (Trustee/Manager), IsDB can seek X To support its outreach/ IsDB has extended a the help of outside consultancy sensitisation efforts, APIF has firms specialising in real estate also engaged in a number of new investment and management to initiatives. These include the design of US$ 100 million help in the structuring of financing, a new logo, website, animated video line of financing to APIF negotiating its terms and conditions and brochure for APIF in line with and concluding its deals. the new corporate identity of IsDB,
[ 103 ] SDGs
Islamic Finance Capacity Building and Awareness Programme
sDB is investing in developing its communication across a wide range of media and events to raise Iawareness of its products and initiatives within the Islamic finance sector
X The programme targets relevant PURPOSE With the onset organisations in various MCs and non- X IsDB’s strategic and tactical of the COVID-19 MCs. These include ministries, central communication activities are part of its pandemic in banks, capital market authorities, insurance overall communication strategy, which has agencies and market players, as well as been adapted in recent months to meet the 2020, IsDB’s financial, non-financial and academic needs arising from the COVID-19 pandemic. communication institutions. X As part of its communication strategy, activities helped X Since the launch of the new IsDB IsDB has launched a Capacity Building and business model and the P5P, IsDB has also Awareness Programme to raise the profile to demonstrate prioritised positioning IsDB President as a and acceptance of Islamic finance around its leadership thought leader in Islamic finance. the world. Through the programme, IsDB is ensuring that the potential of Islamic finance and the role of METHOD to contribute to development objectives is Islamic finance in fully recognised. To this end, IsDB partners X By organising and participating in with other international organisations supporting MCs workshops, seminars, conferences and and MDBs such as the World Bank, during the crisis other events, IsDB is ensuring that as many Asian Development Bank, United Nations people as possible have the opportunity to Development Programme, International hear from experts on Islamic finance and to Monetary Fund, OIC and many others. discuss the opportunities it offers.
X For the events organised under the Capacity Building and Awareness Programme, the nature of the support may comprise financial sponsorship, in-kind support or sponsoring the participation of an expert from an external organisation.
X With the onset of the COVID-19 pandemic in 2020 and as the world navigated the direct impact on industries and economies, IsDB undertook a variety of activities to communicate the support it was providing for its MCs during the crisis. These included: – Working to amplify IsDB’s commitments on a global level – Raising the profile of IsDB’s COVID-19 crisis communication response across all owned channels including website, social media and internal communications channels
[ 104 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
in January 2019 to discuss a technical assistance grant and address challenges facing allocation, utilising funds from the Waqf institutions and discussed Islamic Finance Special Allocation potential innovative solutions for as approved by IsDB Board of the development of this sector. Governors in 2013. The purpose of the conference was to raise awareness and bring X IsDB contributed a budget of together global Waqf investors US$ 327,000 to the International and potential projects in Guinea Conference on Waqf. The resulting and the wider region. awareness, matchmaking and other – The Islamic Financial Services initiatives are expected to mobilise Board Summit 2019, themed millions of dollars of resources for ‘Islamic Finance for Sustainable socioeconomic development, using Development in the Era of Waqf instruments in Guinea and the Technological Innovation’ aimed region. to bridge the significant gaps in the ability of the Islamic financial – Demonstrating strong services industry and global leadership, significant action technological advancement to and reassurance from IsDB to all provide greater opportunities for its core audience groups, both inclusive financial development. internally and externally. – The Green Sukuk Workshop under the UNDP-IsDB Global X The communication strategy Islamic Finance Impact Investing sought to: Platform, organised in Islamabad, – Portray a coordinated response Pakistan in partnership with from IsDB, with a focus on the the Securities and Exchange leadership of its President, Commission of Pakistan. in particular through his chairmanship of the meetings of X IsDB has published in the Presidents of MDBs in 2020 international media outlets a number – Efficiently and accurately of articles authored by the President. disseminate information from It has also utilised its own channels IsDB’s Strategic Preparedness to publish and promote his articles. and Response Programme – Highlight new partnerships X Various communication outlets formed by IsDB to mobilise have reported on IsDB events, resources in the public, private including partnerships with IAEA and philanthropic sectors, such (against women’s cancers), TWAS, as through the World Economic UNESCO and UNICEF; IsDB’s Forum participation in Davos 2020, the – Provide reassurance and regular Paris Peace Forum, UNGA, and G20 updates to IsDB’s extensive events, the Global Islamic Finance internal staff network around the Council Taskforce, Global STS forum, INTERNATIONAL CONFERENCE world, calling on them to act as and Transformers Academy. ON WAQF true ambassadors for IsDB.
INVESTMENT IsDB contributed a budget of ACHIEVEMENTS X Since IsDB’s Capacity Building X Recent events and activities and Awareness Programme was US$ 327,000 undertaken by IsDB to broaden formalised in 2015, a total of 71 to the International awareness about its Islamic finance projects have been approved with leadership include the following: IsDB contributions worth US$ 1.64 Conference on Waqf – The International Conference on million to date. IsDB contributions Waqf, held in Conakry, Guinea to the programme are in the form
[ 105 ] Leaving no one behind
[ 106 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
[ 107 ] SDGs
Women’s Empowerment Policy
he Women’s Empowerment Policy contributes to sustainable and inclusive development in TMCs and Muslim communities in non-MCs
X Intended to guide IsDB towards PURPOSE IsDB will gradually integrating women’s empowerment in X By empowering women and girls and consistently future operations, the Policy is in line with to participate in and benefit from build the capacity IsDB’s 10YS and reform agenda based on the development of their societies the P5P (2017–2022). The Policy will also and communities, IsDB’s Women’s of its staff to contribute to the implementation of OIC Empowerment Policy aims at improving promote women’s Plan of Action for the Advancement of the effectiveness of IsDB’s development Women and the SDGs, specifically SDG 5 assistance so as to bring about greater empowerment (gender equality). socioeconomic returns and deliver on its mandate. in their work programmes METHOD X The Policy is the first of its kind for IsDB X The Policy has four pillars, which and defines a commitment to promote and country reflect the challenges and priorities of women’s empowerment as a means to engagements MCs and IsDB’s institutional and global reduce poverty and foster sustainable commitments to support MCs to realise development and inclusive growth. It their national and international obligations. also marks IsDB’s promise to unlock the The pillars are: untapped potential of women in its MCs – Access and Muslim communities in non-MCs by – Mainstreaming establishing fundamental principles to – Agency guide its programmes and interventions to – Learning. reduce the barriers to women’s economic and social development. X IsDB will address the four pillars guided by the following principles: – Capitalising on synergies and complementarities – Making strategic choices in areas and modes of engagement – Promoting innovation – Being adaptable to ensure inclusivity of all.
X Both the pillars and principles are stimulated by key enablers that leverage IsDB’s comparative advantage and unique instruments, capitalise on its decentralised structure and strengthen partnerships.
X IsDB will commit sufficient human and financial resources and clear and measurable accountability mechanisms for the successful implementation of the Policy.
X The Policy requires IsDB to constantly monitor its own performance in support
[ 108 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
– Identify and address barriers that X The IsDB Group will continue hinder women’s realisation of to explore options for resource their full potential mobilisation to fund standalone – Support women’s and girls’ women’s empowerment access to opportunities and programmes. Specifically, it will resources to ensure that they explore new partnerships and meaningfully participate in and improve existing ones to increase the benefit from IsDB interventions, availability of resources for impactful and that this leads to equitable interventions. In line with the of women’s empowerment. IsDB and sustainable development in strategic direction of IsDB, particular will monitor the implementation of MCs and Muslim communities focus will be given to private sector the Policy and make adjustments elsewhere. resourcing. as needed, recognising that country circumstances may change and X Responsibility for the that operational priorities should be implementation of the Policy WOMEN’S EMPOWERMENT adapted accordingly. resides with the business units POLICY of all departments and entities X The following guiding principles participating in IsDB programmes The Policy has 4 pillars, which are integral to the implementation of and interventions. To this end, IsDB the Policy: is committed to defining and putting reflect IsDB’s institutional – Selectivity in place the strategy and procedures – Adaptability and inclusivity necessary for sound, sustainable and global commitments to – Synergies and complementarities and effective implementation of the – Innovation. Policy. support MCs to realise their
POTENTIAL IMPACTS INVESTMENT national and international X The Policy is designed to achieve X IsDB uses its relevant financial obligations: the following impacts: instruments and windows to fund – Recognise the distinct roles and operations that support women’s Access responsibilities of both women empowerment. and men, which give them Mainstreaming different yet complementary X Although most women’s perspectives, needs, interests, empowerment interventions were Agency roles and responsibilities previously limited to grant resources, – Respond to women’s specific relevant IsDB financing mechanisms Learning needs, interests, vulnerabilities can be mobilised and/or allocated to and capacities fund these interventions.
[ 109 ] SDGs
Civil Society Engagement Policy
he IsDB Policy for Civil Society Engagement enables it to tackle sustainability challenges by Tcoordinating the efforts of all development actors
X The Policy takes into account the PURPOSE The Policy decentralised organisational structure and X MCs are facing complicated and diverse focuses on how strategic priorities of IsDB and benefits challenges in all economic and social to mainstream from the experience, best practice and sectors. lessons learned by IsDB and MDBs in and engage with sectors including education, health, X IsDB has a strong history of engaging CSOs as partners, agriculture, poverty alleviation, economic with civil society organisations (CSOs), empowerment, women’s empowerment which have a comparative advantage in building capacity and youth development. It recognises reaching communities with a range of and diversifying the the different types of CSOs as well as the services in both the public and private diverse needs, trajectories and stages of sectors where IsDB-financed programmes source of financing, development of the 57 MCs and Muslim and projects take place. IsDB also engages alongside country communities in non-MCs. with international and local development endorsement, non-governmental organisations that have X Guided by the 10YS and the P5P as well been leading the delivery of humanitarian innovation, as the SDGs, the Policy aims to: services, building resilience and social partnership, – Set IsDB’s strategic direction to development. systematically engage with CSOs selectivity, solidarity – Create a framework of dialogue, X IsDB sees CSOs as crucial to helping and inclusiveness consultation and partnership with CSOs MCs address their most pressing issues, to foster the sharing of knowledge, and with this in mind it has established a experiences and best practices Policy for Civil Society Engagement. – Improve direct assistance to local communities in MCs and/or Muslim communities in non-MCs through CSOs.
METHOD X The four pillars of the Policy are: – Mainstreaming – Engaging with CSOs as partners – Building capacity – Diversifying the source of financing.
X The following five principles will guide the overall IsDB engagement with CSOs: – Country endorsement — IsDB will work with CSOs that are acceptable to MCs’ governments. – Innovation — The Policy will promote and support innovative and transformative socioeconomic development programmes and projects that advocate for the use of technology and have scale-up potential to increase development results and impact.
[ 110 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
– Advocating the establishment of actions (Policy Pillar 4). These national development policies to include: encourage CSOs’ participation – Using existing and proposed IsDB in the economic and social financing instruments, innovative development interventions of and non-traditional financing MCs. mechanisms – Developing a resource mobilisation plan that analyses POTENTIAL IMPACTS and maps the various financing X The Policy aims to achieve the sources (e.g. traditional and following: non-traditional donors, and – Provide general guidance to IsDB international funds) to engage more effectively with – Encouraging MCs’ governments civil society to include selected CSOs in – Encourage dialogue through IsDB-funded programmes and attendance and exchange operations of CSOs with IsDB’s Annual – Pursuing several other major Meetings, Regional Forums other avenues for resource mobilisation, events such as crowdfunding platforms – Enable the sharing of information – Deploying other IsDB financing on policies, programmes and instruments such as its NGO projects that increase IsDB’s Programme, APIF, ISFD, outreach to engage with targeted Transform Fund and several trust CSOs that might not otherwise funds have access to these resources – Considering innovative financing – Partnership — This principle – Facilitate engagement with CSOs mechanisms under the IsDB requires IsDB to introduce value- through the MCPS and ISFD NGO Transformation added partnerships through a – Create an engagement modality Programme, such as Zakat, network of developers and non- that conveys partnership and the private sector financing and traditional partners willing to work achievement of mutually agreed philanthropic engagements. with IsDB as partners. objectives, in line with the P5P – Selectivity — IsDB will partner notion of IsDB as a network of and work with the primary, developers intermediary and tertiary level – Pay special attention to how CSOs carrying out humanitarian, international CSOs in fragile or economic and social conflict situations can manage development interventions in MCs support for local CSOs, which are and non-MCs. often relatively under-resourced – Solidarity and inclusiveness – Provide targeted CSOs with CIVIL SOCIETY ENGAGEMENT — The Policy adheres to Islamic capacity building support that POLICY principles and practices to leaves them better off in terms of provide the underpinning values capability and sustainability than The Policy recognises the that permit IsDB to support before their engagement with humanitarian and development IsDB different types of CSOs and interventions in its MCs and non- – In the longer term, build the MCs through CSOs. capacity of CSOs with a regional the diverse needs, trajectories mandate and coverage. X As a facilitator, IsDB will play an and stages of development advocacy role by: INVESTMENT – Bringing together key actors and of the 57 MCs and Muslim CSOs to support hard-to-reach X The Policy will adopt a range of populations options for mobilising resources communities in non-MCs – Promoting participation and to support IsDB’s commitment to representation in international engage with and, where appropriate, forums of CSOs finance civil society engagement
[ 111 ] SDGs
Fragility and Social Resilience Policy
ome of the most fragile and conflict-affected areas are within IsDB MCs . This includes over 50% or 19 of S the 36 countries categorised by the World Bank in 2018 as fragile and conflict-affected.
X The purpose of the Policy is to set the PURPOSE The Policy has four standards and strategic direction of IsDB X The IsDB Fragility and Social Resilience pillars — investing to strengthen institutions, build resilience Policy contributes to the implementation in prevention, and contribute to social cohesion and of SDG 16 on Peace, Justice and Strong sustainable development in MCs. The Institutions. The Policy is aligned with transitioning relief Policy seeks to address the drivers of the third pillar of the Inclusive Social to development, fragility ranging from social and economic Development of the 10YS, where IsDB exclusion and marginalisation to unequal seeks to address the needs of populations supporting recovery development. Drawing on the experiences at risk of being left behind, encompassing and challenges faced by other MDBs, the core areas such as health, education, and resilience, and Policy accents a partnership approach, employment, crisis support, building mobilising resources especially in focusing on prevention and institutions, the empowerment of women bridging the important transition between and the alleviation of extreme poverty. for resilience relief and development.
X The Policy is aligned with the P5P, METHOD which calls for IsDB to be proactive and responsive to MCs challenges, including X IsDB has developed its own framework fragility and conflict. It takes into account for intervention that is centred on the dual the decentralised organisational structure challenges of addressing fragility and and strategic priorities and business model conflict and building resilience. of IsDB and is based on the best practices and lessons learned from other MDBs and X Six guiding principles form the international development actors. foundation of the Policy: – Country ownership – Adaptability – Solidarity – Selectivity – Context and conflict sensitivity – Partnerships.
X The Policy prescribes that IsDB does not engage in: – Activities beyond its mandate – Primary responsibilities of other agencies like the United Nations, including peacekeeping, disarmament and other security, human rights and political affairs – Issues of criminal and interpersonal violence – Working with armed forces.
X The Policy addresses conflict and fragility risks whose dynamics and impacts may be conceptualised within the following pillars:
[ 112 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
– Supporting recovery and to alleviate suffering, eradicate resilience — This (post-conflict) poverty and build resilience pillar includes addressing four – Adaptability — IsDB calls for primary types of capital (physical, tailored procedures, processes financial, human and social) and guidelines to respond to the which conflict impacts. The Policy challenges of fragility states that IsDB should contribute – Solidarity — The Policy adheres to peacebuilding and post-conflict to Islamic principles that provide recovery and reconstruction the underpinning value and spirit through its Recovery and to promote peace and save lives Resilience Plan (RRP) focusing and livelihoods on the reconstruction of critical – Context and conflict sensitivity physical infrastructure, human — IsDB acts to mitigate negative and social capital, restoration of impacts (‘do no harm’) and basic social services, governance, maximise positive impacts (‘do social cohesion, and key good’). institutional development. – Partnerships — IsDB aims at finding synergies with partners – Mobilising resources for to achieve shared goals, in the resilience — IsDB seeks to spirit of the 2030 Agenda for leverage its resources and Sustainable Development and impact in situations of fragility current global initiatives. – Investing in prevention — This and conflict by partnering with (pre-conflict) pillar concerns the other relevant humanitarian INVESTMENT adoption of development policies and development actors, in countries with no manifest decentralising decision making, X IsDB is committed to contributing conflict, but with inherent risks of and using global platforms to peacebuilding and post-conflict fragility, instability and/or crisis. for crowdsourcing and other recovery and reconstruction Prevention approaches are in participatory methods to through its RRP, focusing on the line with the 2030 Agenda for maximise knowledge, innovation, reconstruction of critical physical Sustainable Development and the resource mobilisation and infrastructure, human and social twin Resolutions on Sustaining coordination. capital, restoration of basic social Peace, including the prevention services, governance, social cohesion of the “outbreak, escalation, and key institutional development. POTENTIAL IMPACTS continuation and recurrence” of The RRP is usually the basis of an conflict. X Spearheading an Islamic finance investment programme emanating – Transitioning relief to development model, IsDB continues from a multi-donor post-conflict joint development — This (during- to foster long-term partnerships to assessment of damage and needs. conflict) pillar aims at staying provide self-sustaining resources to engaged in situations of ongoing alleviate poverty, address fragility conflict through activities that and conflict, build resilience, and SIX GUIDING PRINCIPLES bridge relief and development. support sustainable socioeconomic The Policy provides the scope for development. In this, IsDB follows The Policy's six guiding a modest engagement aimed at six guiding principles outlined in the mitigating the impacts of conflict, Policy: principles are country strengthening sustainable peace, – Country ownership — IsDB building societal and institutional ensures that all its country ownership, adaptability, resilience, and fostering social engagement, policies and cohesion. In doing so, IsDB will programmes in resilience solidarity, selectivity, context support programmes and projects building are aligned with national that bridge the gap between development plans and priorities and conflict sensitivity, and humanitarian aid and development, – Selectivity — IsDB is selective in including providing basic social its interventions according to its partnerships services, youth empowerment and development mandate and where education in emergencies. it has the comparative advantage
[ 113 ] SDGs
Restoring sight for a clear path out of poverty
he Alliance to Fight Avoidable Blindness is a global partnership of 32 partners that seeks to address the T considerable problems caused by lack of access to eye-care services in many MCs
preventing avoidable loss of sight, the PURPOSE The Alliance to Fight Alliance can make a major impact in the X IsDB launched the Alliance to Fight Avoidable Blindness lives of many people. Avoidable Blindness (AFAB) in 2008, aims to carry out reflecting a long-term vision to improve X During 2008–2015, AFAB focused on lives and put an end to diseases causing 1.5 million cataract treating cataracts, which are a major cause vision loss. IsDB saw the opportunity operations and 10 of blindness. IsDB raised US$ 10 million to work with partner organisations on for this work in eight African Countries multiple strategies to combat preventable million consultations — Benin, Burkina Faso, Cameroon, Chad, eye diseases by developing intervention Djibouti, Guinea, Mali and Niger. programmes. These include the provision in addition to the of examinations to detect and correct distribution of X It provided eye care to 244,000 people, ocular refraction errors. As the Alliance restoring eyesight to more than 49,000 enters a new phase, the aim is to maintain eyeglasses and blind people from different age groups, the progress achieved so far and to step up capacity building and provided training to 177 local eye-care capacity building activities for the future. personnel. activities X The second generation of AFAB METHOD (2019–2023) focuses on supporting the X Through AFAB, IsDB is committed development of comprehensive, accessible to continuing to work with its partners and sustainable eye care services, with to foster global cooperation that brings a broadening of the Alliance’s work to tangible benefits to the poorest people in strengthen the eye health systems in 13 the world. By improving eye health and African Countries.
X Treatments are made available for a wide range of preventable and curable conditions which cause blindness.
X Approximately one million children will be screened at schools and those who need glasses will be provided with a pair.
X Scholarships will allow new eye health personnel to be trained and local training institutions to be strengthened in countries with few ophthalmologists.
X The creation of treatment centres for glaucoma and diabetic retinopathy will allow people to access help for these specific diseases.
X The investment in the programme will bring free of charge eye-care to millions of people in Burkina Faso, Chad, Comoros,
[ 114 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
INVESTMENT X Together with ISFD, IsDB engaged in discussions with the 32 partners to consolidate their pledges and firm up their financial and technical commitments.
X IsDB, through RL and ISFD, is coordinating the second generation of the Alliance, which will comprise a large-scale five-year Action Plan for each targeted country.
ALLIANCE TO FIGHT AVOIDABLE BLINDNESS
For the period 2019–2023,
IsDB has raised US$ 250 million for treating cataracts in
13 African countries —
Burkina Faso, Chad, Comoros,
Côte d’Ivoire, Djibouti,
Côte d’Ivoire, Djibouti, Guinea, – Tunisian Technical Cooperation Guinea, Guinea Bissau, Mali, Guinea Bissau, Mali, Mauritania, Agency Mozambique, Niger, Somalia and – Prevention of Blindness Union Togo. – International Agency for Mauritania, Mozambique, Niger, Prevention of Blindness. X The second generation of Somalia and Togo AFAB, which is planning to perform ACHIEVEMENTS many cataract surgical operations, currently comprises IsDB and ISFD X 15,000 cataract operations and SINCE 2019 in collaboration with more than 32 60,000 eye consultations have been partners, including: conducted in nine MCs since 2019. cataract – Light for the World (Austria) 15,000 – Azerbaijan International X Capacity building programmes operations and Development Agency have been organised in Turkey 60,000 – Direct Aid (Kuwait) and Tunisia for young African eye consultations have – Moroccan Medical Association ophthalmologists from 13 IsDB MCs. for Solidarity been conducted in – Al Bassar International X There are plans to further expand Foundation geographical coverage and resource MCs – Arab Bank for Economic mobilisation through non-conventional 9 Development in Africa means such as crowdfunding.
[ 115 ] SDGs
Social Outcome Guarantee through the One WASH Fund
hrough a Social Outcome Guarantee Fund and other initiatives, IsDB is supporting development Tprojects via interventions that secure outcomes and minimise investor risk
– Help to reassure fixed-income investors, PURPOSE The One WASH who frequently perceive the risk of X Meeting the ambitious targets set out Fund uses an outcome non-delivery as high, especially in the SDGs requires significant increases innovative financing in the context of developing countries in financial resources compared to what – Facilitate the issuance of Development has traditionally been channelled to mechanism designed Impact Bonds in IsDB MCs developmental projects. to attract new – Drive local and international NGOs in participating countries towards more X IsDB, together with ISFD and ICIEC, has philanthropic and outcome-focused interventions. designed a Social Outcome Guarantee Fund to provide guarantees for NGOs private investor METHOD willing to structure a Development Impact capital in addition Bond in eligible sectors. X The initiative brings an innovative to traditional approach to development and humanitarian X The initiative will: humanitarian donor finance: – Protect fixed-income investors from – Creating synergies through formalised development outcomes and non- financing engagement platforms between delivery risks development banks and NGOs – Absorb some of the risks of the – Leveraging the core strengths of each structure to enable the issuance of the party Development Impact Bond – Achieving the aim of transforming IsDB into a platform for developers – Leveraging development finance, humanitarian aid and private capital investment to support Development Impact Bonds.
X Development Impact Bonds can act as a strategic instrument to support development and humanitarian actors to focus more on outcome delivery.
X The bonds are based on a ‘pay for results’ mechanism, with grant payments committed from donors (outcome funders) only after implementing the projects and delivering the pre-agreed outcomes.
X Planned outcomes directly contribute to key social benefits for target populations in MCs, related to: – Education – Health – Poverty alleviation.
X Primarily, the model blends outcome-
[ 116 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
Bond supported by the guarantee system is the One WASH Fund and Sukuk.
X The aim is to: – Eradicate cholera and other diarrhoeal diseases in MCs, specifically reducing cholera- related deaths by 90% in the most affected MCs over the next 10 years – Reach over 5 million people by 2030 – Contribute to the attainment of SDGs 3, 5, 6, 13 and 17.
INVESTMENT X The first tranche of the programme is scheduled to start in Q4 2021 and targets Bangladesh, for an amount of US$ 30 million out of a total programme size of US$ 210 million.
AIMS OF THE INITIATIVE
To reduce cholera-related deaths by 90% in the most affected MCs over the next 10 years based financing with grant financing ACHIEVEMENTS in a structure that has favourable outcomes for participating funders X The One WASH Fund is set to and stakeholders, allowing for a new implement programmes in 29 OIC To reach over approach to resource mobilisation member states, where it aims to 5 million for humanitarian development impact the lives of five million people people by 2030 organisations. by strengthening and integrating the delivery of water, sanitation and X IsDB is supporting the hygiene (WASH) with health services. development of impact bonds as It uses proven methodologies that SIZE OF THE PROGRAMME a strategic instrument that sees are already being practised at the outcomes directly contributing to grassroots level by the International important social benefits related Federation of Red Cross and Red US$ 210 million to education, health or poverty Crescent Societies. alleviation for the target populations in MCs. X The first Development Impact
[ 117 ] SDGs
Catalysing resources for the Gaza Central Desalination Plant Programme
sDB is taking part in an initiative to bring much-needed safe water to the Gaza Strip, one of the most Idensely populated areas in the world, with about two million inhabitants . Availability of fresh water in Gaza is amongst the lowest in the world
international donors including IsDB made PURPOSE The desalination pledges to finance the programme, paving X The entire population of Gaza depends plant is the major the way for the procurement actions to start. mainly on groundwater and some imported component of the water from Israel. Approximately 97% of X The aims of the GCDP are to mitigate the water in Gaza is not safe for drinking GCDP and will have the water crisis and to improve the living due to high salinity and high nitrate levels an annual capacity conditions in the Gaza Strip. from human and agricultural pollution. 3 According to the World Health Organization, of 55 million m METHOD this situation is the root cause of more than 25% of waterborne diseases in Gaza. X With the Gaza initiative, IsDB is playing a major role in mobilising resources for the X In order to address this humanitarian GCDP, through its privileged partnership and environmental crisis, IsDB and other with donors from the region. In addition, as major international stakeholders, including manager of special trust funds dedicated the European Investment Bank (EIB), to Palestine, IsDB will be providing and the European Commission (EC) and the managing resources on behalf of its World Bank (WB), are pooling resources regional partners for the GCDP. to implement a landmark water-related programme. X The GCDP is focused on: – Developing new water sources for X A key date in bringing the partnership domestic water supply to fruition was a donor conference held – Increasing the efficiency of distribution in Brussels on 20 March 2018. This date networks marked the kick-off for the Gaza Central – Increasing collection of revenues from Desalination Programme (GCDP), as water sales.
X Once implemented, this landmark programme will be the largest infrastructure project ever built in the Gaza Strip.
X The programme consists of two main components: – A seawater reverse osmosis desalination plant, which will have the capacity to desalinate 55 million m3 of potable water per year and will be equipped with an independent power generation facility – Associated works, which will ensure that fresh water is distributed to all residents across the Gaza Strip.
[ 118 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
X The GCDP is a multi-stakeholder to help mitigate the impacts of manage the pledged resources on partnership anchored around three climate change in the water- their behalf. major players: stressed region. – IsDB, representing the Arab Gulf X In February 2020, the Board States X All the land needed for the of Executive Directors formally – EIB, representing the EC and EU programme implementation has approved the establishment of an member states been acquired, and some of the IsDB-managed trust fund to channel – WB, covering its own contribution associated works financed by the the Arab Gulf States funding of the and other bilateral international WB are under implementation. GCDP. donors. X The conceptual design of the X As the project evolves, IsDB will water desalination plant has been be administering a trust fund for ACHIEVEMENTS completed. € 291 million in grant resources. X Developing this large These resources will help achieve infrastructure investment in the X Bidding documents have been SDGs 3, 6, 13 and 17. context of the Gaza Strip is a finalised and the selection of the time-consuming and difficult task, contractor to design, build and X This unprecedented achievement particularly given the challenging operate the desalination plant is is fully aligned with the commitment geopolitical environment surrounding underway. of the P5P to mobilise resources for the programme. MCs to achieve the SDGs.
INVESTMENT X Despite the challenges, a number of actions have been completed. X With a minimum proposed contribution from IsDB of US$ 7.5 X The initiative has achieved million, it has been possible for IsDB MOBILISED RESOURCES financial close, as the partners have to mobilise resources amounting been able to mobilise the amount to € 582 million from a coalition of With a minimum proposed needed to finance the programme. international partners, including the EC, the EIB and the WB. contribution of X The feasibility study has been completed, providing an X IsDB is currently negotiating environment-friendly solution to with its main partner, the EIB, to US$ 7.5 million energy supply for the desalination finalise the details of the agreement IsDB was able to mobilise plant, which benefits from: for an EIB-managed trust fund for – A power supply package channelling financial resources to the resources amounting to composed of photovoltaics, wind programme. turbines and reciprocating engines – Renewable energy, which is X IsDB is also negotiating with the € 582 million expected to provide up to 15% of regional donors, namely Abu Dhabi the annual energy consumption and KSA, for parallel agreements to
[ 119 ] SDGs
COVID-19 Strategic Preparedness and Response Programme
rom the onset of the COVID-19 pandemic, IsDB has mobilised and worked synergistically to respond to F the calls for support from its MCs . The Strategic Preparedness and Response Programme (SPRP) was developed as part of this process
PURPOSE Collaboration METHOD X The overall objective of the SPRP is to with UN Agencies X The programme adopts a ‘Respond, support the efforts of MCs in preventing, involves 24 Restore and Restart (3-R)’ approach, containing, mitigating and recovering from holistically addressing MCs’ emergency, the impact of the COVID-19 pandemic. agreements short-term and medium-term needs. amounting to X Given the massive disruptions caused X Respond: This track delivers emergency by the pandemic, recovery requires diligent US$ 124.45 million, support aimed at: processes that integrate short-, medium- – Strengthening health systems to provide and long-term measures among disparate of which 17 have care to the infected parties, leveraging the help of partners been signed for – Building capacity in production of worldwide. testing kits and vaccines US$ 112.57 million. – Building pandemic preparedness X IsDB launched the SPRP with this To date, a total of capacity, in cooperation with the G20 premise, providing financial support Global Initiative. aligned with short-, medium- and long-term US$ 74.30 million needs and bolstered with the promise of has been disbursed X Restore: This track delivers medium- technology, which underlies the design of term actions through financing for trade all IsDB’s interventions. The programme under these and SMEs: targeted the following needs: agreements – To sustain activity in core strategic – Partnerships in resource mobilisation value chains and delivery – To ensure continuity of supplies for the – Innovation in financing structures health and food sectors, and for other – Fast-track processes and action. essential commodities.
X Restart: This track delivers long-term action to build resilient economies on solid foundations and catalyse private investment by supporting economic recovery and countercyclical spending, which aligns with the IsDB business model of leveraging US$ 10 billion that aims to unlock US$ 1 trillion worth of investments.
X A Strategic Resource Allocation Model and an associated Country Needs Assessment Framework were developed to prioritise support to MCs.
X To accelerate the support to MCs, IsDB has adopted innovative, accelerated
[ 120 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
internal project processing methods partners in the SPRP in twelve INVESTMENT without comprising on the principles MCs (Guinea, Chad, Burkina Faso, of quality and governance. Sierra Leone, Senegal, Mozambique, X IsDB’s SPRP facility is Maldives, Benin, Cameroon, Guinea enabling investment amounting X IsDB used fit-for-purpose Bissau, Mali and Yemen). to about US$ 2.3 billion to finance procurement arrangements through interventions that tackle the impacts the emergency provision stipulated X Some of the key expected outputs of the pandemic. in procurement regulations, which of IsDB’s investment in the SPRP are: allows for direct contracting and use – 24,000 health staff trained X Approvals — To date, IsDB Group of the services of United Nations – 141,000 health workers provided has approved a financing amount of specialised agencies. with personal protective US$ 1.96 billion representing 68% of equipment (PPE) the SPRP commitment, broken down X A Global Coordination Platform – 7,426 hospital beds added as follows: based on blockchain technology – 262 hospitals equipped – US$ 788 million by IsDB, US$ 89.9 was established to fast-track and – 3,110 beds equipped in intensive million by ISFD, US$ 601 million strengthen the interventions under the care units by ITFC, US$ 133 million by ICD, SPRP. The Platform coordinates aid – 150 labs equipped US$ 344 million by ICIEC and delivery and mobilises financial and – 5,316 medical equipment/ US$ 6.9 million by KAAP technical resources to support MCs. supplies provided – Most of the projects approved so – 210 ambulances and vehicles far fall in the Response track of X The IsDB Group COVID-19 procured the SPRP. Guarantee Facility was developed to – 4 million cases tested facilitate the direction of additional – 5 million testing kits procured X Disbursements — IsDB's total resources from external partners to – 1,712 ventilators procured SPRP disbursements stand at interventions in industries and SMEs. – 9 million people given food US$ 748 million. supplies – As of November 2020, 22 projects – 10 million PPE items provided had begun disbursing via the ACHIEVEMENTS – 7,420 SMEs/MSMEs supported Global Coordination Platform X IsDB has forged a partnership – 12,000 people provided with – ITFC has disbursed US$ 170 with the Arab Coordination Group access to finance. million (48%) against signed (ACG) culminating in the joint contracts that total US$ 235 declaration of US$ 10 billion in X The expected impact of the million under the SLA interventions for COVID-19-related approved SPRP operations on its – Total disbursements to UN projects. A projects pipeline has been 52.3 million beneficiaries will result agencies stand at US$ 74.5 agreed for the countries in the region. in: million against a total value of – 43.3 million people reached signed contracts amounting to X Apart from financing support, through awareness campaigns US$ 112.57 million. IsDB has deployed its flagship on COVID-19 transmission and RL modality to share expertise, prevention knowledge, national experiences – 8.9 million households in acute and best practices to cope with the food insecurity supported PARTNERSHIP WITH THE ARAB COVID-19 crisis, across countries. with food rations to meet their COORDINATION GROUP nutritional needs for at least one X Through the RL modality, IsDB month IsDB partnership with ACG mobilised US$ 2.25 million to acquire – 59,600 jobs created for revival critical medical items and to adopt of priority value chains and culminating in the joint advanced technology systems economic sectors and applications to combat the – 23,596 health workers provided declaration of pandemic. Approximately US$ 1 with capacity building support to million was mobilised to build manage the COVID-19 response US$ 10 billion laboratory capacity in MCs. – 20,000 micro-enterprises in interventions for and households receiving X Five UN Agencies (UNOPS, microfinance services COVID-19-related projects UNICEF, WHO, UNDP and UNFPA) – 7,420 SMEs provided with are functioning as implementing financial assistance.
[ 121 ] SDGs
Skills-centric empowerment of women and youth — Bangladesh pilot
omen and young people in Bangladesh are benefiting from new opportunities as a result of an IsDB Winitiative featuring small grants for training and skills development
PURPOSE IsDB’s grant METHOD X With financial support from IsDB, the financing initiative X The initiative contributed to its goal by: Centre for Mass Education in Science in Bangladesh has – Increasing young women’s capacity (CMES) implemented an employment- to engage in economic activities by centric initiative, the “Women Empowerment raised awareness of equipping them with new skills related Programme through Livelihood Skills the negative impact to fashion garment production and Training and Human Rights Awareness” basic computer skills; and conducting in the Tangail (Suruj), Rajshahi (Damkura), of discrimination literacy, numeracy and computer skills Chapinawabgonj (Elaipur) and Dinajpur and enabled training for the youngest women (Ranirbandar) districts of Bangladesh. – Employing young women by networking community support and creating links with local and X The initiative aimed to improve for human rights national organisations to identify sustainable livelihoods for vulnerable young jobs, conduct orientation sessions for women aged 19 to 35 years, facilitating trainees on job protocols and place economic and social empowerment and them in the identified jobs human rights awareness in Bangladesh’s – Raising awareness of women’s remote rural areas. rights and eliminating gender-based violence through awareness sessions X The initiative was launched in October among women, men and youth; 2018 and ran until September 2020. identifying community champions or influencers willing to engage with the project; and convening community dialogue to raise awareness of the negative impact of discrimination and how the community can support human rights for all, especially for women and girls – Adopting a participatory approach through which all stakeholders are involved in the initiative’s implementation – Encouraging male members of the beneficiaries’ families and community to play a pivotal role in a sensitisation session, in which human rights awareness-raising will help prevent incidents against women – Tailoring the human rights awareness curriculum, including issues of gender equality, violence against women, in line with the SDGs and building in existing tools.
[ 122 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
personal matters independently and other related equipment to ACHIEVEMENTS and participate in the family create the environment needed for X 500 young women were trained decision-making process capacity development activities and in basic fashion garment production – A number of peer educators still to achieve future sustainability. and computer literacy, 300 of whom informally disseminate messages received advanced-level training. on human rights issues in their X Nine job fairs were arranged, and neighbourhoods and share them 85 job counselling sessions were X 63 MoUs were signed between with their relatives and friends. In conducted. CMES and employers/local some cases, they have provided entrepreneurs to place the training advisory support to the victims of X The initiative contacted 168 graduates in jobs. gender-based violence. local relevant private enterprises and institutions to explore job X The training positively impacted X When the COVID-19 virus opportunities for the graduates. the occupational pattern and income spread, the beneficiaries used of the training graduates and raised remnant clothing from the training X The initiative mobilised additional awareness. After completing the programme to make masks. resources, which resulted in the project, a sample survey found that: IsDB shared standards for mask local government donating 9 sewing – Before joining the training production with the implementing machines to the poorest of the programmes only 10% were partner. Production began in March trainees. engaged in economic activities. 2020 and as a result: This number increased to – 2,000 masks were produced: 800 X The graduate trainees 64% after enrolling in the at the training centres and 1,200 who established their own training programmes, 11% in by the trainees at home microbusinesses received loans from employment/jobs, and 50% in – 800 masks were distributed free their relatives and local NGOs to buy business/self-employment to rickshaw pullers, garment the needed equipment. – The 10% of participants who were workers, women and children in economically active before the the community X The training centres established training earned up to US$ 24 per – Individual trainees in their own with IsDB funds are currently used month while, after completion of communities sold 1,200 masks for further training beyond the life of the training courses: – 26 trained women took up the initiative. — 36% of participants earned up entrepreneurship to engage in to US$ 24 mask production using their own X This pilot initiative proved to be — 24% of participants earned up resources very successful, with high potential to US$ 60 – The trainees benefited from for further investment by IsDB for — 2% of participants earned up to videos on CDC standards for additional scale-up and replication in US$ 120 mask production, followed other districts. — 1% of participants earned necessary infection prevention above US$ 120 measures, and produced 2-layer – The monthly average income re-usable cloth masks WOMEN EMPOWERMENT increased to US$ 37, from only – Mask-making was added to the PROGRAMME US$ 5 before the training curriculum of the implementing – A sample survey with the partner, which was beyond the IsDB has approved graduate trainees and members project’s original plan. of the community shows that the awareness level on human rights US$ 100,000 INVESTMENT issues increased significantly for the Women Empowerment among the training graduates X IsDB has approved US$ 100,000 as well as in the community of for the Women Empowerment Programme through the around 12,000 people in the four Programme through the Livelihood districts selected for the initiative, Skills Training and Human Rights Livelihood Skills Training and 80% of which were articulated on Awareness Initiative. women’s rights Human Rights Awareness – The graduates and many women X Four training centres were in the community reported that established using IsDB’s funds to Initiative they could take decisions on provide sewing machines, computers
[ 123 ] SDGs
Lives and Livelihoods Fund
sDB’s collaboration with donor partners is achieving impressive development results through the Lives & ILivelihoods Fund (LLF) . Partners in the LLF include Abu Dhabi Fund for Development, Bill and Melinda Gates Foundation, the UK Foreign, Commonwealth & Development Office, ISFD, King Salman Humanitarian Aid and Relief Centre, and Qatar Fund for Development
X Non-traditional donors have continued PURPOSE External resource to emerge as important contributors to the X In recent years, IsDB has recognised mobilisation is global development financing landscape, the need to expand the concessional underway, with especially in the regions of IsDB MCs. resource financing envelope for critical In particular, the Bill and Melinda Gates human development projects in the least US$ 407 million Foundation (BMGF) was looking to partner developed MCs (LDMCs) beyond what was in donor grants with regional players with common available — approximately US$ 350 million objectives to: annually. already mobilised – Expand its work in IsDB MCs – Increase the regional ownership of its X With the global adoption of the SDGs, the to increase IsDB’s programmes situation became more urgent, with renewed concessional – Allow the Foundation to scale up emphasis on the need for increased public its footprint through a ‘financing for spending and ownership of socioeconomic financing capacity development’ initiative. development initiatives by MCs. – Expand financing capacity of MCs while meeting international debt sustainability targets.
X The BMGF had previously collaborated with IsDB in the Pakistan Polio Eradication Programme, with highly positive outcomes. Recognising the potential for further mutually beneficial ventures, the two institutions jointly devised an innovative multilateral cooperation model which is today known as the LLF.
METHOD X The LLF was conceptualised to build on IsDB South-South cooperation model, having regional donor partners and IsDB work together to maximise affordable concessional financing for critical human development projects in LDMCs.
X Blending with OCR helped multiply donor contributions to allow interventions at scale, which might not have been possible with grants alone.
X The LLF seeks to achieve a diverse set of objectives:
[ 124 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
– Mobilising and blending regional – Engagement of ACT (consulting X LLF projects are expected to donor resources in an innovative firm) for the Sahel Sustainable impact hundreds of millions of financing model Growth Project. people (0.5 million in agriculture, 560 – Expanding accessibility of million in health, +40 million in basic affordable concessional financing X Technical experts from donors infrastructure, according to WASH). for human development projects are also involved in providing support in 33 of IsDB’s LDMCs in project preparation, and the LLF INVESTMENT – Leveraging the concessionality Impact Committee has constituted a of financing and combining Technical Review Committee which X The LLF successfully prepared the unique capabilities of all provides input to enhance project a strong pipeline of projects in partners with robust, impactful quality and technical robustness. MCs from 2016–2020 which were development projects approved by its Impact Committee. – Utilising the collaboration to pilot X Blending of donor grants innovation in project processing with IsDB OCR has substantially X Concessional financing approved within IsDB. increased the concessional financing by the LLF Impact Committee to- capacity of IsDB as a whole: date is US$ 1.54 billion (US$ 370 – The concessional financing million in grants; US$ 1.165 billion in ACHIEVEMENTS envelope from the LLF was OCR). X The LLF partnership has maintained, despite limited expanded from the initial two lending overall in 2018 and 2019 X The projected size of the LLF at institutions to a total of seven – The proportion of critical human conclusion is US$ 1.7 billion, more partners including six donor development financing from IsDB than the total concessional financing organisations, the most recent has substantially increased over the provided from IsDB’s own resources addition being the UK’s Foreign, last few years thanks to the LLF. (IsDB loans plus ISFD loans) during Commonwealth & Development the same period, more than doubling Office (formerly DFID). X The LLF has gained recognition IsDB’s offering of concessional in the development community and financing. X Three regional donors are part of there has been a scaling up of co- the initiative besides ISFD, namely financed projects within the LLF. X The portfolio includes 35 socio- Abu Dhabi Fund for Development, development (health, agriculture, King Salman Humanitarian Aid and X Beyond co-financing, some and basic infrastructure) projects Relief Centre and Qatar Fund for development partners are working in 22 IsDB MCs, targeting the most Development. directly with the LLF in eligible vulnerable. countries to develop proposals and X US$ 407 million in donor grants feasibility studies so that MCs can X The majority of the 2016–2018 has been mobilised for the LLF and meet the requirements and apply for portfolio is already disbursing. made available for allocation to IsDB LLF financing. Overall disbursement operations social development projects. stand at over 57%, including the X The Global Fund has actively recently approved 2020 projects. X In addition to donor grants, the worked with and provided TA from LLF makes available additional its health system, strengthening X Approximately US$ 210 million resources through its Project resources in the Benin, Senegal, and has been disbursed to date, with Preparation and Implementation Togo health projects of the LLF. promising results on the ground. Facility (PPIF). The PPIF provides the required Technical Assistance (TA) X Despite LLF projects being in to complex LLF socio-development complex socio-development sectors, LIVES AND LIVELIHOODS FUND projects. The TA is not limited to the the (average) portfolio processing PPIF, and a number of projects have time remains at par with IsDB The total concessional benefited from additional direct TA prescribed timelines via: from donor partners, including: – Close follow-up, monitoring, and financing provided is – US$ 1 million provided for support to project teams feasibility assessments and – TA provided to projects from LLF US$ 1.54 billion other support for the LLF Guinea donors and from the PPIF Conakry Water and Sanitation – Incorporation of design methods Project promoting quicker processing.
[ 125 ] SDGs
Revolutionising the Scholarship Programme
hrough its Scholarship Programme, IsDB is helping MCs and Muslim communities in non-MCs close the T human capital gap to expand their participation in global markets
The Programme is now focused on PURPOSE Demand for further development-related fields, particularly X Since IsDB launched its Scholarship education has never sustainability sciences to empower Programme in 1983, over 18,000 men been stronger in communities and MCs to achieve the and women from 56 MCs and 67 Muslim objectives of the SDGs and IsDB’s P5P. communities in non-MCs have received IsDB’s MCs and scholarships in various disciplines relevant Muslim communities X IsDB has established two new to sustainability sciences. international selection committees in non-MCs comprising 16 external eminent X Despite the deep impact of the academicians and scientists active in fields Programme on the lives of the beneficiaries, related to sustainable development in MCs its footprint has not expanded as expected and Muslim communities in non-MCs. due to marketing and targeting issues. X Islamic finance, economics, finance and banking, international economics, METHOD journalism, political sciences, law, X To encourage the acquisition and intellectual property and entrepreneurship transfer of science and technological have been included as subjects for the first knowledge and expertise to MCs, IsDB time. All study programmes have been has concluded cooperation agreements expanded to assist students from non-MCs with top universities to ensure high quality as well as MCs education for its students and scholars at affordable cost. X The application selection process is managed by two independent international X Fields of study have been revisited committees, for the undergraduate and to address critical challenges with postgraduate programmes respectively, direct relevance to sustainability issues. specialised in their fields to encourage greater community participation, ensure a more transparent process and identify candidates with the highest potential.
X Female students’ participation is being enhanced in all programmes to achieve SDG 5 (gender equality).
X A new joint financing scholarship programme funded by the ISFD has been launched, aimed at reducing poverty and targeted at LDMCs. The programme provides educational opportunities to young men and women to pursue technical vocational education and training (TVET).
X To help MCs attain the SDGs, IsDB has established a partnership with the World Academy of Sciences (TWAS) in
[ 126 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
Italy. This joint programme, which communities in Angola, Botswana, network between graduates beyond supports capacity building aimed British Indian Ocean Territory, national boundaries, and to play at generating critical mass in STI to Dominica, Haiti, Peru, South Sudan, a vital role in the development of address sustainable development Swaziland, Finland, Taiwan, Ukraine knowledge-based economies in their challenges of MCs, led to the and the United Kingdom. countries. This will help to ensure the following initiatives: wider impact of graduates. – Support for 20 scholars to X Partnerships with major undertake up to 6-month organisations such as TWAS and X Cooperation with reputable postdoctoral research training UNESCO are helping to advance SDG universities and ministries of higher in key areas relevant to achievement in MCs through STI. education in MCs have brought IsDB sustainability sciences Scholarship Programmes to a new – A grant for a joint research and X IsDB has signed an MoU with height of international reputation. technology transfer project on selected local NGOs in Muslim topics related to sustainability communities in non-MCs to assist X The IsDB Scholarship Programme challenges relevant to the SDGs in in reaching potential students and has helped students and alumni MCs implementing programmes. achieve their career aspirations, – Support for 11 refugee scientists with many graduates currently and other scientists at risk in X Partner universities in scholarship holding key strategic positions MCs to access the TWAS Young programme management are being such as head of state, minister, Affiliates Programme encouraged to monitor the academic global health specialist, world-class – Organisation of a high-level performance of students, conduct scientist and technological expert. workshop in 2019 on the science- mentorship programmes and speed They are championing technological policy development nexus, the up students’ disbursements. innovation and change to secure a first of its kind in the Muslim bright future for their countries. world. X IsDB has developed new agreements and launched joint INVESTMENT scholarship programmes in 2020 ACHIEVEMENTS with Campus France in France and X Thanks to the partnerships X In 2018, IsDB evaluated the the Presidency for Turks Abroad and achieved through its Scholarship Programme and restructured it to Related Communities. It has also Programme, IsDB has made cost accommodate changes driven by negotiated new agreements with savings of around US$ 43 million technological progress. Following Princeton University and Harvard during the last two years and this restructuring, there has been an University in the United States and almost tripled the annual number of increase in scholarship applicants Makerere University in Uganda. scholarships awarded with the same from 2,200 in 2018 to 187,000 in IsDB has implemented partnerships allocated operational budget. 2019 from 192 countries and to with the University of Cambridge, 210,000 in 2020 from 193 countries. the University of Oxford and Queen X IsDB has offered 469 additional Mary University of London in the scholarships to students from 16 X In 2020, IsDB awarded United Kingdom, as well as with Muslim communities in non-MCs scholarships to 1,221 students from Copenhagen University in Denmark from the repayment of interest-free 114 countries, comprising: and McGill University in Canada. loans by scholarship graduates, aiming at ensuring the long-term – 746 students from 109 X Partnerships for free or sustainability of the programmes. countries for the Undergraduate subsidised education have also Programme been established with the Ministry – 196 students from 92 countries of Education, Malaysia, the Council ISDB SCHOLARSHIP PROGRAMME for the Masters’ Programme of Higher Education, Turkey, the – 160 students from 58 countries Moroccan Agency for International Benefiting more than for PhD and Post-Doctoral Cooperation (AMCI), Morocco, the Programme National University of Uzbekistan, 2,500 university students – 119 students from 20 LDMCs for and Tashkent University of the IsDB-ISFD Programme. Information Technologies. in 88 countries around
X For the first time, the Programme X IsDB’s new alumni portal is under the globe supported students from Muslim construction to establish an effective
[ 127 ] SDGs
Mainstreaming climate resilience in IsDB operations
sDB is committed to helping its MCs in tackling climate change and has worked through its Regional I Hub system to provide support for Bangladesh and Maldives
X These issues threaten sustainable PURPOSE Addressing risks development and economic growth in X Climate change carries significant risks from climate Bangladesh. Due to climate change, the for MCs. Indeed, many coastal countries change is at the country is also subjected to more extreme in Asia such as Bangladesh and Maldives weather events such as: are already facing severe impacts of heart of IsDB- – Seasonal cyclones climate change and this is set to worsen funded projects in – Flooding considerably in the coming years unless – Droughts appropriate action is taken. Bangladesh and – Erosion.
X Since the approval of its climate change Maldives X As a low-lying island nation, Maldives is policy, IsDB has mainstreamed climate one of the Small Island Developing States action and supported building resilience (SIDS) that is most vulnerable to climate through its operations. change, due to: – Rising sea level X Although the Government of Bangladesh – Population density is implementing a wide range of measures – Dispersed geography to improve the country’s climate change – Economic reliance on nature-based resilience, Bangladesh faces significant tourism, fisheries and marine resources. climate change threats, namely: – Rising sea levels X In particular, rising sea levels in Maldives – Inadequate safe drinking water are causing: – Infrastructure challenges. – Stress on water resources and infrastructure – Severe impacts on the fishing industry – Food insecurity arising from the loss of fishing resources.
X The country is also vulnerable to a range of natural disasters, including tropical cyclones, storms, heavy rainfall, floods, storm surges, swell waves, tsunamis, and climate-related hazards such as accelerated sea-level rise, sea surface temperature rise, and changes in monsoon pattern.
METHOD X After carrying out climate risk screening of IsDB operations in Bangladesh and Maldives, projects were designed with measures to address identified climate risks in both countries.
X The initiatives in Bangladesh and Maldives are in synergy with the new
[ 128 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
X Two IsDB-financed projects are expected to generate considerable impact to address climate change in Maldives: – Upgrading of 10 severely tsunami-affected harbours with sustainable facilities, with disaster risks and climate resilience considerations factored into the reconstruction process – The Greater Male Waste Management Project, which is expected to generate both climate mitigation and adaptation benefits by developing a climate resilient waste management facility as well as a sustainable waste-to-energy facility.
INVESTMENT X IsDB has approved 13 projects worth US$ 1.03 billion to promote renewable energy generation and uptake in Bangladesh.
business model and the P5P, cum-cyclone shelters with climate- supporting low carbon and resilient resilient features, including durable development in these countries. water and solar systems. BANGLADESH X The projects in these countries X IsDB also provided finance for the are also contributing to IsDB’s following projects: IsDB has provided commitment to support the SDGs. – A submarine fibre-optic-cable project that supported the upgrading of mobile connectivity US$ 18 million ACHIEVEMENTS which will enable quicker financing to produce solar X In Bangladesh, IsDB extended dissemination of information and US$ 18 million financing for an SHS support early warning systems, electricity programme provided by IDCOL, even in remote areas which has: – Expansion and upgrade of the – Strengthened the use of rural road network that has environment-friendly renewable enabled people to access safe THE KAAP PROGRAMME energy systems shelters with ease and facilitated – Made solar electricity available to easy evacuation of exposed
77,000 rural households through people in the event of a climate US$ 130 million installation of SHSs. disaster financing has enabled the – Shelters that provide safety even X The provision of a US$ 130 million during major climate disruptions construction of school- financing under King Abdullah bin or events 157 Abdulaziz Programme for Charity – Water and sanitation system cum-cyclone shelters Works — KAAP (formerly known as development that is helping Fael Khair Programme) has enabled people to deal with climate the construction of 157 school- stresses during extreme events.
[ 129 ] SDGs
Economic Empowerment Fund for the Palestinian People
new fund set up by IsDB will assist more than 300,000 Palestinian families A over the next decade
X The economic empowerment approach, PURPOSE The EEFPP has as envisioned by the P5P, will be a catalyst X The IsDB’s Economic Empowerment successfully built an and facilitator for IsDB’s implementing Fund for the Palestinian People (EEFPP) attractive pipeline of partners to act as market developers. is a US$ 500 million impact investment vehicle/fund that provides blended finance investment projects X EEFPP objectives: in the form of equity capital and structured and financing – Improve the livelihood and resilience of financing, in addition to technical youth, poor and marginalised groups in assistance. opportunities Palestine – Achieve financial and social returns with X The EEFPP goal is to reduce poverty, measurable impact empower the poor, lessen aid-dependency – Provide an investment platform to amongst the Palestinian people and channel financial and non-financial develop a solid and sustainable ecosystem, resources to MSMEs, cooperatives, transforming the poor from mere recipients unions and solidarity groups, among of financing to real business partners. others, in accordance with Islamic principles. XThe EEFPP will contribute to strengthening the involvement of youth and METHOD poor families in local value chains through a variety of projects. In doing so, it is fully X The EEFPP applies global best compatible with IsDB’s new business practices in governance and investment model and GVC approach. management in its work with poor and unemployed youth in Palestine. A seasoned external fund manager (GP) with international experience and strong track record in impact investments will be hired to manage the investments and operations of the EEFPP.
X The EEFPP builds on the successes of the Deprived Families Economic Empowerment Programme (DEEP), an IsDB economic empowerment pilot programme that achieved tangible success in its objective of promoting Islamic microfinance in Palestine and focuses on: – Economic viability standards – Investment concepts (cost and profit) – Advanced mechanisms, knowledge and field experience that work in harmony to create the desired social and economic goals.
X To take advantage of the successful DEEP initiative and its economic and social
[ 130 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
impacts and reach a larger group – Short-term investments — X The first contributions from the of Palestinians, IsDB set up the Investing in other funds or shareholders were settled according EEFPP, with an initial target capital of vehicles serving the mandate of to the Shareholders’ Agreement. US$ 500 million. the EEFPP.
INVESTMENT X IsDB will also contribute a further X The EEFPP will work in full US$ 100 million (20% of the target partnership with the private sector X The following is a list of the capital) to the Fund’s capital. as well as financial and non-financial Fund’s current shareholders: institutions in Palestine and will – IsDB: US$ 100 million X IsDB envisions that the new fund coordinate with relevant government – ISFD: US$ 52 million will empower more than 300,000 bodies such as the Palestinian – Palestine Investment Fund: Palestinian families in the next Monetary Authority (PMA), the US$ 25 million decade. Palestinian Investment Promotion – IZDEHAR Palestine Fund: US$ 30 Authority (PIPA), the Palestinian million X The EEFPP is founded on a Capital Market Authority (PCMA), – Al-Aqsa Fund: US$ 13 million. scientific economic vision, striving and the Ministry of Economy and to establish an integrated framework Social Development. X With regard to the Fund’s and interlocking all economic fields investments, three MoUs have been in order to achieve the following signed with the PMA, the PIPA and ACHIEVEMENTS objectives: the PCMA, with the objective of – Resource sufficiency to cover X One year after its establishment, obtaining the required incentive the major needs of the target the Fund mobilised an additional packages the Fund might need. population US$ 120 million from various – Scaling-up IsDB’s economic partners, which increased its capital X The Fund’s team is also working empowerment interventions in to US$ 220 million, or 44% of the on updating a study for the Palestine final target. establishment of the first economic – Supporting the economic empowerment company or bank in development and contributing X This success comes at an early Palestine. to strengthening the resilience stage of the Fund’s operation and and immunity of the Palestinian ahead of a comprehensive planned economy resource mobilisation activity. ECONOMIC EMPOWERMENT FUND – Developing and disseminating FOR THE PALESTINIAN PEOPLE the concept of economic X Regarding the Fund’s governance, empowerment through Islamic the Board of Shareholders has met IsDB set up the EEFPP with finance mechanisms. twice under the chairmanship of IsDB President, and the Management an initial target capital of X The EEFPP is expected to fulfil Committee has met three times. its mandate through the following modes of intervention: X The Fund’s Board adopted the US$ 500 million – Establishment of economic internal regulations of the Board of and will contribute a further empowerment financial Shareholders and the Management institutions in Palestine Committee, the investment – Provision of lines of financing procedures and management US$ 100 million (LoF) to local banks and FIs to be rules, the reporting system, the LoF leveraged to finance economic guidelines, and the business model empowerment projects in of due diligence for LoF applicants. The Fund is expected Palestine – Equity participation in FIs and X The Fund’s team reviewed six to empower more than high-impact private sector investment opportunities, four of companies and businesses them approved by the Management 300,000 Palestinian – Provision of LoF to the economic Committee for further due diligence, empowerment programmes and and the remaining two will be families in the next decade projects submitted to the Management – Capacity development, research, Committee in the second half of technical studies, M&E 2021.
[ 131 ] SDGs
Saving Women’s Lives from Cancer
ogether with the International Atomic Energy Agency (IAEA), IsDB is harnessing the T power of innovation to address women’s cancers
X IsDB and the IAEA have a longstanding, PURPOSE In September 2021, successful collaboration around improving X There has long been a pressing need the longstanding cancer treatment and outcomes for to prioritise diagnosis and treatment partnership between the countries where they are active. To of women’s cancers in IsDB’s MCs and effectively address the enormous challenges beyond. IsDB and the IAEA at hand, the two organisations have will enter a new developed a Partnership Initiative for Breast X This requires significant investments and Cervical Cancer Control in Low- and involving a broad range of partners phase, with the Middle-Income Countries (LMICs), aiming to: in comprehensive cancer control, to – Contribute to the global effort to save achieve the dual aims of saving lives and launch of a trust millions of women’s lives from breast strengthening national health systems. fund to support and cervical cancer by giving them a fair chance through increased access to X Among the most urgent requirements this initiative. IsDB prevention, diagnostics and treatment, are expanded access to screening and is also planning an in cooperation with other United Nations effective, safe and sustainable cancer partners diagnostics and treatment services. official pledge aimed – Provide a tangible contribution towards at bringing global SDGs 3, 5, 9 and 17 by working with other United Nations partners to improve METHOD partners together gender equality and basic human rights X As part of the partnership, IsDB is around the initiative and promote access to health services currently working with the IAEA on an and improved sexual and reproductive initiative called Saving Women’s Lives from health and rights of women as well as Cancer. to encourage innovation and increased research and development spending.
X The initiative utilises a platform which will marshal resources from the public, private and philanthropic sectors and the general public under a financial blending mechanism, the Public-Private- Philanthropic Partnership for People (5Ps).
X The new platform will address cancer prevention, screening, diagnostic and treatment services for women in IsDB-IAEA common MCs. It is expected to contribute to saving over one million women’s lives from breast cancer and 3.7 million women’s lives from cervical cancer over the next decade.
ACHIEVEMENTS X The initiative has reached the implementation phase, despite the difficulties presented by COVID-19.
[ 132 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
diagnostics and treatment for women with breast and cervical cancer in common LMICs.
X The winners of the Call for Innovation were announced at the same event.
INVESTMENT X The initiative has so far raised more than US$ 144 million, broken down as follows: IsDB: US$ 80 million from OCR (for the Uzbekistan Project over 5 years); IAEA: US$ 7.78 million grant; MCs: US$ 51.28 million (including US$ 41.87 million from the Government of Uzbekistan); ISFD: US$ 2 million grant over 4 years; Non MCs: US$ 2.86 million grant (Belgium, France, Monaco, Russia, Sweden, United Kingdom, and United States); Private sector: US$ 316,132 (Varian, Elekta); Philanthropists: US$ 260,000 grant (Direct Aid).
X A Call for Innovation was detection of breast and cervical THE PUBLIC-PRIVATE- launched through the IsDB Engage cancer in low-resource, rural PHILANTHROPIC PARTNERSHIP platform, which works to accelerate coastal areas FOR PEOPLE economic and social progress in the – The innovator Virasoft Inc. developing world through the power whose app technology ViMo Expected to contribute to of STI. Applications were received will help train pathologists for from 36 countries and selected consultations while TelePath saving over 1 million by the IsDB Scientific Advisory application will give pathologists Board. Each of the winners received with less experience the women’s lives from breast US$ 50,000 to help them advance opportunity to share images and their projects and contribute to videos with experts cancer and 3.7 million saving women’s lives. – The Cervical Cancer Prevention Programme, whose socially women’s lives from cervical X The winners of the Call for innovative proposal aims to Innovation are: establish a community-based cancer over the next decade – The City Cancer Challenge screening, treatment and Foundation, whose proposal vaccination activities revolving in common MCs will increase access to quality around mother-daughter care for women with breast relationships. cancer, and help with training healthcare professionals to offer X In September 2020, IsDB FUNDS MOBILISED a multidisciplinary approach to held an event as part of the IAEA cancer care General Conference, to take stock More than – The International Centre for of achievements made since the Diarrhoeal Disease Research, launch of the partnership initiative. Bangladesh, with an innovative The event outlined how IsDB and US$ 144 million screening toolkit that will have a the IAEA complement each other sustainable impact on the early to advance comprehensive cancer
[ 133 ] SDGs
Smart education and skills development for refugees
sDB is building resilience among young refugees and hosting communities through smart I education and skills development
– Establishing the building blocks for PURPOSE The matching fund social cohesion and the reduction of X The Syrian crisis has produced more mechanism aims at violence. than 13 million forcibly displaced people, improving access of whom 7 million are internally displaced X The IsDB refugee education programme while 6.7 million are refugees who have fled to education for aims to: to neighbouring countries including Turkey, Syrian refugees – Create pathways for young refugees and Lebanon, Jordan, Iraq and Egypt, with hosting communities from education another 1 million across Europe. Young in Iraq, Jordan, into decent employment opportunities, people and children whose education is through job placements and/or the suddenly interrupted by war constitute the Lebanon and Turkey creation of one’s own business largest proportion of the refugees. through vocational – Increase access to education for internally displaced persons (IDPs) X IsDB is focusing on educational education for and refugees with smart education support to address the lack of adequate decent employment enrolment international financial contributions in this – Provide remedial education through regard. Investing in education can lead to to economically complimentary curricula and student positive outcomes including: empower young textbooks. – Supporting peace, stability and building the future refugees METHOD – Preventing the loss of an entire generation during conflict X Targeting 2,010 young Syrian refugees – Improving the perception of learning and IDPs, the programme provides environments as safe and supportive quality education, scholarships for higher – Improving livelihoods educational and vocational degrees, – Improving confidence in the ability of technical diplomas and short courses. It governments to provide social services also provides economic empowerment and entrepreneurship support, entrepreneurship training, coaching and financing support to SMEs, soft and technical skill training, internships and employment opportunities.
X The programme seeks to: – Enhance access to electronic and vocational education and training for IDPs inside Syria – Provide access to vocational education and training for Syrian refugees in Turkey, Lebanon, Jordan and KRG-Iraq – Empower Syrian students to find or create jobs through entrepreneurship and business skilling for employment – Build an electronic Smart Education system characterised by freedom and ease of access, targeting more than 700,000 students and 300 schools
[ 134 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
X To mobilise resources to support – 1,150 students have access – Developing digital tools to be MCs to cope with the pressures of to vocational education and used strategically to enhance Syrian refugees, IsDB has developed training related to the host beneficiaries’ access to the a matching fund mechanism to community labour market. The programme. increase resources allocated to the focus is on relevant studies education of these refugees. The that offer the best chances for INVESTMENT mechanism engages non-traditional employment after graduation. partners and international NGOs who This includes 2-year diplomas X IsDB has approved US$ 7 can contribute matching funds. and 3 to 9-month certificates in million from ISFD resources for this TVET programme. X After a series of consultative – The programme assisted 460 workshops with key development students to find jobs and/ X The total investment, including partners and active international or internships through job the matching funds mobilised, is NGOs to participate in the financing and technical skills training, US$ 16 million. of the education programme, 12 internships and job placements. international NGOs were selected to It also assisted 115 students X To date, IsDB has mobilised over form a consortium, in order to: to start their own businesses US$ 9 million from international – Contribute matching funds to the through entrepreneurship training, NGOs, including Spark International programme’s cost a business plan competition, from the Netherlands, Wafaa – Participate in the implementation financial support and coaching/ International Group from Indonesia, of the programme. incubation International Islamic Charity – A Student Information System Organization, and Sheikh Abdullah X The matching fund mechanism was established, allowing IsDB to Nouri Charity from Kuwait, in aims at improving access to follow students from application addition to US$ 7 million from ISFD. education for Syrian refugees in to postgraduation Iraq, Jordan, Lebanon and Turkey by – Under Smart Education, a providing vocational education for comprehensive study was decent employment to economically prepared to analyse the empower them. The overall scope educational requirements of the of the programme covers remedial, refugee students and identify electronic and vocational education target beneficiary students and skills development. Around – An all-subject electronic MOBILISING FUNDS 705,000 students and 2,000 teachers curriculum for grades 1–4 has will benefit from these activities in been set, while that of grades 5 To date, IsDB has mobilised the Smart Education programme. and 6 is in progress – The electronic platform was over designed and is being tested, ACHIEVEMENTS with successful results. The beta X The progress achieved in the version will be launched soon. US$ 9 million programme so far includes the from international NGOs following: X Other plans include: – 10 local CSOs and vocational – Enhancing capacity for 20 TVET education institutions were institutions and local CSOs in the selected as local implementing region with a view to providing SMART EDUCATION PROGRAMME partners with a proven track education opportunities for some record in working with Syrian 1,500 Syrians, including IDPs and Around refugees and IDPs. They received refugees, building their skills and 700,000 capacity building training on preparing them for the labour students, teachers communication, counselling, market 2,000 community-based psychosocial – Offering 460 students and schools will interventions, project internships/job opportunities 300 management, finance, M&E, and and 115 Syrian refugees access benefit from these activities HR management at selected to finance for their start-up institutions and CSOs based on enterprises, reaching a total of their needs 575 individuals
[ 135 ] SDGs
Global Islamic Food Security Platform
n agile and comprehensive Islamic Food Security Platform offers the opportunity for Muslim countries A focused on addressing hunger and food security to augment agri-food value chains and create a sustainable and resilient food and agribusiness infrastructure among IsDB MCs
PURPOSE With the emergence METHOD X The COVID-19 pandemic greatly of the COVID-19 X The Islamic Food Security Platform increased the vulnerability of at least 65 pandemic in early (IFSP) will transform the current Adahi million people in IsDB MCs. Many still face arrangement (distribution of Hajj meat to the risk of suffering or dying from hunger. 2020, food security beneficiaries) not only to distribute and has become one of manage the meat, but also to help and X 45 million of the most vulnerable people support all poor Muslims in acute hunger in in the world live in IsDB MCs. It is therefore the most pressing the short term. The use of excess capacity essential that IsDB responds quickly as the from the Adahi Project in 2020 and total annual food deficit in MCs amounts to issues globally, blockchain technology with open ledgers around US$ 67 billion. especially in the for procurement and distribution will be the first of its kind in the world, building trust X Poor populations are vulnerable to surges Muslim world and transparency and making the Platform in food prices since they spend a high globally competitive. share of their income on staple food alone. According to the International Rice Research X The use of blockchain technology in Institute, 700 million poor people live in rice- the procurement exercise will set a gold growing countries in Asia, spending 30–40% standard for food security programmes of their income on rice alone. globally, while promoting the use of this technology in MCs agri-food industries.
X Setting up the IFSP is a building block in developing resilient and vibrant agri-food value chains in the Muslim world, given the immense resources available in the various countries in the long term.
X The proposed global food reserve will provide immediate assistance to countries encountering catastrophe, in addition to solving food shortages for MCs. It will provide alternative physical storage for MCs, by benefiting from economies of scale and utilising existing infrastructure. The IFSP will also develop the agriculture industry by initiating local agriculture production in MCs.
X Increasing growth through productivity has to be achieved to avoid famine and mass starvation in the long term. The IFSP will therefore focus on narrowing the yield gap and supply/ demand gaps in MCs through increased food productivity.
[ 136 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
X The yield gap, which is the main industry to thrive by boosting trade problem in Africa and some parts of between MCs and enhancing their MEMBER COUNTRY FOOD Asia, will be reduced by promoting competitiveness through regional SECURITY investments to adopt high-yielding cooperation. varieties that are tolerant to pests 45 million of the most and drought. The IFSP will also ACHIEVEMENTS promote local production by vulnerable people in the world connecting local farmers to global X The proposed platform will markets and sourcing the IFSP protect the vulnerable populations in live in MCs with an annual food reserve from them. Accordingly, MCs from food insecurity and keep MCs’ food import dependence will importing countries safe from the deficit of decrease. adverse effects of price instabilities in the global food market. Food X An effective and efficient stocks will initially begin with rice US$ 67 billion marketing information system is and later expand to other food grains, required to successfully implement such as wheat and corn. the proposed global reserve. ISLAMIC FOOD RESERVE Farmers in developing countries PROGRAMME INVESTMENT still lack access to reliable market information, despite the introduction X By setting up the Islamic food Setting up the IFSP is a of information technologies in reserve, IsDB will be: many countries. Farmers will be – Leading humanitarian food building block in developing able to leverage IsDB’s blockchain reserves among Muslim countries platform to gain timely market and communities globally resilient and vibrant information and better integrate to – Enabling Muslim countries and the marketplace. communities to withstand food crisis and price shocks agri-food value X Measures will be adopted not only – Progressively building an in the Muslim to ensure MCs’ food security but also agri-food value chain through chains to strengthen trade linkages among production, consumption and world them and throughout the world. trade within and between The IFSP will help the agri-food countries.
[ 137 ] SDGs
KAAP mobile medical units
n IsDB poverty relief initiative is bringing much-needed help to underserved A populations in many MCs
The Mobile Medical X The locations of the clinics (some of PURPOSE Unit project which are equipped with solar power) in X The health sector in most MCs faces rural areas lacking health facilities are multiple challenges in delivering quality contributes to decided in coordination with the respective services in line with the needs of the governments and local communities. population, particularly the rural poor, the SDG 3, with elderly, the very young, the disabled and emphasis X The aim of the mobile medical units the chronically ill. Health indicators for (MMUs) project is to provide medical care the most marginalised groups are worse on reducing in rural areas for needy people in seven than the general population, indicating communicable Asian countries, using 75 multi-purpose deep inequalities to which the system is mobile medical units. currently not responsive. diseases associated with child and X The MMU project contributes to SDG 3, X The late King Abdullah bin Abdulaziz with emphasis on reducing communicable entrusted IsDB with the implementation maternal mortality diseases associated with child and of the Fael Khair Programme (now called maternal mortality. King Abdullah bin Abdulaziz Programme for Charity Works – KAAP) for poor and METHOD disadvantaged people. This Programme is executed in close coordination with the X KAAP launched an MMU project King Abdullah Humanitarian Foundation. covering the following seven countries: – Yemen, India, and Pakistan (15 clinics each) – Bangladesh and Afghanistan (10 clinics each) – Tajikistan and Kyrgyzstan (5 clinics each).
X In 2019, eight MMUs went on the road, offering health services to needy people in rural areas in the Khyber Pakhtunkhwa and Sindh provinces of Pakistan. By 2020, the construction of 10 MMUs was completed in Tajikistan and Kyrgyzstan and are expected to be fully operational during the second half of 2021.
X The MMUs provide several medical services, including primary health care as well as secondary health care in some clinics. In addition to the rapid response and emergency health services provided to the recipient communities, the project also provides training to the local medical staff managing the clinics.
X The MMU project targets more than 1.14
[ 138 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
hospital, it has opted to build four comprehensive health centres in rural areas.
X In the case of Yemen, KAAP is evaluating several options and mechanisms to resume the project, bearing in mind the current situation on the ground.
X The MMUs for Tajikistan and Kyrgyzstan are ready to operate during 2021.
X In Pakistan, operation of the MMUs started in August 2019 with eight MMUs, six for primary healthcare services and two for surgical care services.
X In Bangladesh, five MMUs are still under construction, while three have already been launched for testing and commissioning and are expected start offering services during 2021.
INVESTMENT X The total amount used to launch the MMU project was US$ 242 million, distributed among million beneficiaries annually, aiming Afghanistan, Bangladesh, India, ACHIEVEMENTS to reach 5.7 million patients over a Kyrgyzstan, Pakistan, Tajikistan and five-year period in the seven recipient X Implementation of MMUs is Yemen. countries, when all units become currently underway, with varying fully operational. These services will progress between participating directly address the lack of health countries. In Bangladesh, Kyrgyzstan, services in rural and remote areas. Pakistan and Tajikistan, the project is THE MOBILE MEDICAL UNIT making good progress, while in other PROJECT X The project will complement countries it is still in its early stages. existing health systems and serve as The project targets over an enabler to achieve both the local X Except for India, where KAAP health strategy and related SDGs. is dealing directly with local NGOs, agreements have been signed with 1.14 million X The project will run for the relevant governments. There beneficiaries annually, aiming approximately seven years for each are plans for a pilot project in India, country, as it involves two phases, hopefully before the end of 2021. to reach 5.7 million the first phase being the supply of units (about two years) and the X The Government of Afghanistan patients over a five-year period second phase being the operation has chosen to establish a specialised of the units for a minimum period of cardiology hospital in Kabul to in the 7 recipient countries five years, after which they may be help the poor who cannot travel handed over to the local authorities/ outside the country for heart communities. disease treatment. In addition to the
[ 139 ] SDGs
IsDB–ISFD NGO Empowerment for Poverty Reduction Programme
sDB worked with several partners to launch an ambitious IsDB–ISFD NGO Empowerment for Poverty IReduction Programme to empower national civil society organisations (CSOs) to improve the socioeconomic wellbeing of hard-to-reach communities
X The scope of the Programme includes: PURPOSE As valuable – Mapping, screening and categorising X In 2019, IsDB introduced its NGO development national CSOs in selected MCs Empowerment for Poverty Reduction partners and – Building the capacity of the selected Programme, which aims to help CSOs in CSOs the 57 MCs to better meet the needs of developers, CSOs – Promoting innovative and vulnerable groups such as refugees, IDPs, help to promote transformative projects in identified orphans, people with disabilities and the thematic areas most deprived. citizen participation, – Setting up sustainable innovative financing mechanisms for CSOs X The Programme is an innovative enhance through crowdfunding and partnership. transformation initiative that supports sustainability and development interventions by interlinking X Currently, the Programme is working to the work and experiences of CSOs, private alleviate poverty to provide: enterprises, and social investors specialised accelerate progress – 115,000 refugees, IDPs and orphans in crowdfunding and blockchain. It with access to quality basic education comprises: towards the SDGs and relevant skills development – Education for refugees, IDPs and – 3,000 low-income families with access orphans to community livelihoods development – Job creation through income-generating activities. – Building resilience – Livelihoods development. METHOD X At the heart of the Programme is the international aggregated Tadamon platform, which provides a tool for empowering CSOs and networking in IsDB’s 57 MCs by providing visibility, funding, capacity building and knowledge.
X As an aggregated platform, Tadamon serves as a guide for citizens and the private sector to make it easier to financially support the humanitarian and development efforts of CSOs. This is done by linking numerous crowdfunding campaigns from several existing crowdfunding platforms.
X With 10,000 followers, Tadamon is committed to connecting the efforts of all partners to build stronger communities and help the vulnerable.
[ 140 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
X Taking an innovative approach, mapping workshops in six countries – The seed contribution of ISFD the platform’s Impact working model (Morocco, Indonesia, Lebanon, to the grant financing of the has six dimensions: Tunisia, Somalia and Kazakhstan). Programme is US$ 10 million. – Innovate — Facilitating and – UNDP has provided US$ 1.61 supporting innovative ideas X A distance-learning capacity million that have the potential to scale building programme has been – International NGOs have up and increase humanitarian established in close partnership contributed US$ 7.31 million development and build resilience between IsDB and Save the – Participating CSOs have provided – Mobilise resources — Using Children — Humanitarian Leadership in-kind contributions amounting cutting-edge flexible financing Academy. This learning programme to US$ 2.11 million. mechanisms, such as will support CSOs’ institutional crowdfunding and Islamic social capacity and efforts to raise funds X Through innovative financing financing, to build partnerships as well as to manage, implement, and the Tadamon platform, the across a range of avenues to monitor and evaluate projects for Programme will continue to meet critical causes and build a grassroots communities. increase the initial resources sustainable source of support for allocated by tapping non-traditional vulnerable groups X Over US$ 800,000 has been partners such as the private sector, – Promote — Branding and mobilised through the Tadamon foundations, philanthropists and packaging CSOs’ impactful ideas platform to support hard-to-reach innovative financing mechanisms. and achievements to scale up and communities. Outcomes of the Crowdfunding in particular has the increase development results, Tadamon platform to date include: potential to generate resources thus showcasing and celebrating – Increasing access of over 50,000 amounting to US$ 20 million during the progress and achievements refugees and orphans to quality the period of the Programme. of our partners through the IsDB basic education and relevant Group CSOs Forum skills development X During the COVID-19 pandemic, – Assist — Assisting and – Providing 3,000 low-income IsDB developed the Tadamon CSO empowering CSOs in MCs families with access to Pandemic Response Accelerator through institutional capacity community livelihoods Programme, which aims to help 17 development to effectively and development through income- MCs to prevent, contain and respond efficiently respond to MC needs generating activities to the immediate and medium-term – Connect — Connecting and – Strengthening institutional negative impacts of COVID-19. In bringing together networks of capacity of over 500 NGOs/CSOs addition, a Pandemic Response developers through mapping – Increasing resources Accelerator Window on Tadamon has and screening of CSOs, sharing through access to innovative so far raised over US$ 24.5 million of knowledge, experience, best financing such as partnership, actual commitments from partners practice and information crowdfunding and blockchains for 11 MCs with a target population – Transform — Investing in – Organising five capacity building of 7.3 million beneficiaries living in transformative projects and ideas workshops by IsDB to help vulnerable communities. that improve the socioeconomic mainstream fragility, conflict conditions of hard-to-reach and disaster management and communities. civil society engagement into operations. THE TADAMON PLATFORM ACHIEVEMENTS INVESTMENT X At least 24 MCs have so far Over US$ 800,000 officially endorsed and supported the X The total cost of the Programme, Programme. launched in September 2019, is has been mobilised through US$ 21 million, with technical and X The Programme has mapped and financial contributions from various the Tadamon platform to screened more than 600 CSOs in MCs. development partners including the African Development Bank, the support hard-to-reach X There have been 12 national United Nations High Commissioner awareness raising, crowdfunding for Refugees, Save the Children communities and capacity building programmes International, Plan International and in MCs, including introductory CSO Spark.
[ 141 ] SDGs
Youth Development Sector Policy
sDB has launched three youth initiatives, leading to a significant expansion in its capacity to Iaddress the needs of young people in its MCs
– Youth Employability Platform (YEP!), PURPOSE Solving youth which highlights good practices and X Young people in MCs face significant problems is a long- strategies to improve the skills of young challenges, ranging from extreme poverty term task that will people seeking work in MCs. to poor educational opportunities and high unemployment. On average, IsDB involve government X The integrated YDS aims to ensure that annually allocates around 8% of its financial action supported IsDB efforts and resources are directed support to youth development projects towards the goal of socioeconomic and programmes. It is currently engaged in by development progress for youth in MCs. The objectives three major youth initiatives: of this strategy are to support young – Youth Development Strategy (YDS), institutions and women and men towards two principal which outlines a focused and guided by the voices objectives: comprehensive strategic framework – To be productive and economically for the development of young people in of youth themselves empowered so as to contribute to the MCs development of their societies – Youth Development Working Group – To be engaged and responsible, in order (YDWG), which advocates for youth and to embody and embrace leadership. provides a platform to share knowledge on best practices X The YDS has three interlinked strategic pillars, education, economic empowerment and engagement. These pillars aim to empower youth to take action and accept responsibility in driving growth and adding value to the economic and social development of their communities.
X The YDWG was established in June 2019 to address the issues of youth development through building on the collective experiences and commitment of a number of development entities.
X The YDWG comprises representatives from a group of MDBs and international development organisations that advocate for youth development issues and seek to increase synergy through collective work on wide-ranging youth development interventions.
X The members of the YDWG are: IsDB, WB, African Development Bank, Asian Development Bank, EBRD, Inter-American Development Bank, GIZ, International Trade Centre, ILO, OECD, UNESCO, UNDP, UNICEF and UNDESA.
[ 142 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
– Refining and applying good X The stories of these organisations practice methodologies are featured on the blog page of YEP. – Peer review mechanisms – Exploring potential areas of X Since its inception, the YDWG collaboration/implementation has taken part in or organised three – Addressing a common agenda knowledge-sharing events: of advancing youth development – OECD launch of Global Report, issues ‘Governance for Youth, Trust and – Supporting integrated strategies Intergenerational Justice’ for young people’s engagement. – Presentation by Commonwealth Secretariat introducing X The YEP! platform works towards youth policy priorities for X Established in April 2019, YEP! is the aims of the P5P in raising Commonwealth member states, a knowledge-sharing online platform awareness and creating linkages. with a focus on evidence-based for organisations that focus on youth It addresses youth employability youth policies and the Youth development, including governments along the GVC in the industries IsDB Development Index tool and policymakers, youth-led and is championing, contributing to the – YDWG Webinar on the Youth youth-focused organisations, body of knowledge produced in the COVID-19 Responses of its donor agencies, CSOs, multilateral area of youth development through: members. organisations, private sector entities, – Industry focus and educational institutions. – Balanced scope and scale of INVESTMENT programmes X The platform refers to – Geographic representation. X Recent IsDB investments in youth ‘employability’ rather than programmes include: ‘employment’ as its focus is beyond – Vocational Literacy Programme ACHIEVEMENTS the discourse of ‘getting a job’ and (US$ 500 million) more about creating a conducive X The YDS is focusing on – Microfinance Support environment and ecosystem, interventions at strategic, country Programme (US$ 500 million) including attitudes, skills, functions programming and operational – Youth Employment Support and structures required to sustain levels, prioritising collaboration with Programme (US$ 250 million) and enhance economic growth. other development organisations to – Education for Employment mobilise resources and capitalise on Initiative (US$ 250 million) technical expertise to address the – Education for Competitiveness METHOD youth development agenda. (US$ 300,000). X The mandate of the YDS is to address all types of youth X The desired impacts include education through its operations establishing IsDB as a credible partner in economic and social of choice in youth development WORLD EMPLOYMENT SOCIAL infrastructure and inclusive social by supporting youth networks, OUTLOOK development. It fosters youth partnering with youth groups, and economic empowerment through facilitating volunteering opportunities. The ILO 2018 World programmes in economic and social Communication and outreach infrastructure, Islamic finance, mechanisms are being established to Employment Social Outlook private sector development, and promote ‘buy-in’ and build a sense of inclusive social development. In ownership among the beneficiaries. reported the global youth addition, it supports countries in their efforts towards developing X During the COVID-19 pandemic, unemployment rate at mechanisms to promote an enabling YEP! has been used to enhance environment for youth engagement. knowledge about the impact of 13%, a level three times the pandemic on youth. The IsDB X With a focus on education and Youth COVID-19 Response Blog is higher than the adult rate of economic empowerment, the YDWG an online knowledge initiative aimed achieves its objective by: at documenting the efforts and 4.3% – Sharing information and initiatives being implemented at an experiences organisation level.
[ 143 ] SDGs
Saudi Gelatin and Capsules Co.
he world's industry of gelatine, extracted from pork and used as an ingredient in most basic foodstuffs, T children’s sweets and ice cream, is almost exclusive to China, Europe and the West in general . As an alternative to this Sharia-prohibited product, the Kingdom of Saudi Arabia decided to use the remains of slaughtered animals during the Hajj season, previously thrown in landfills and polluting the Holy Sites, to produce halal gelatine . This would serve Muslim consumers and help preserve the purity of the Holy Sites
X Establishing a new national industry: PURPOSE As an alternate “Made in Saudi Arabia" and "Made in X Provide a world-class quality halal to pork-based Makkah", as per the Vision 2030. product from the Makkah-based gelatine gelatine, the plant. X Recruit Saudi employees to leverage Kingdom of Saudi the extensive experience of the company's X Establish a leading brand in the world Arabia decided to current staff. of halal food and pharmaceutical gelatine industries. use the remains of X Promote Saudi Arabia's position as regional leader of the halal food and X Shift the project into profitability to slaughtered animals pharmaceutical industries. ensure its sustainability. during the Hajj METHOD X Meet gelatine product needs first in season to produce Saudi Arabia, and then in the Arab region, halal gelatine X Adopt continuous innovation and in the best possible manner and with the development of halal gelatine products with highest international quality standards. highest quality standards.
X Apply good manufacturing practices (GMP Standard).
X Promote the values of integrity and responsibility.
X Adopt quality and safety standards.
X Support strategic partnerships.
ACHIEVEMENTS X The only factory of its kind in the entire Gulf region.
X Extensive experience of the first generation, ranging between 20 and 25 years, in capsule manufacturing in the region, and its gradual transfer to second-generation citizens.
X The only company in the region that possesses state-of-the-art automatic capsule sorting and inspection equipment, which makes manufacturing defects practically non-existent.
[ 144 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
X Reducing sheep, goat and cow are easy to swallow and dissolve hide soaking time in the gelatine harmlessly in the stomach. MANUFACTURING OUTPUT plant using the globally accustomed alkaline method from 40 days INVESTMENT down to only 5–7 days, which has Production of various types an obvious manufacturing cost- X Import of capsule manufacturing reduction effect. equipment and accessories, made of halal gelatin for purposes according to the latest technology by X Global edge in the extraction the world's biggest and most famous such as pharmaceutical, of gelatine from the hide of sheep, manufacturing, supply, technical goats and cows in compliance with support and technological solutions nutritional and industrial international quality standards. company.
X Production of various types X Global trade and technical Manufacture of safe multi- of halal gelatine (pharmaceutical, alliances and partnerships with nutritional and industrial). the two largest global companies, sized hard gelatin capsules one specialised in gelatine X Production of hard gelatine production and the other in capsule (0, 1, 2, 3, 4) capsules in a pharmaceutical safe manufacturing equipment, solutions multi-size form (0, 1, 2, 3, 4), which and support.
[ 145 ] BUILDING AN AGILE ORGANISATION
[ 146 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS Introduction The good governance of a multilateral development bank requires a commitment to regularly look backwards at what has worked and what should be changed, in order to generate a workable vision for the future .
Three clear messages emerged from IsDB’s 40-Year Retrospective Assessment, conducted as part of the groundwork for our new Ten-Year Strategy that became the centre of the institution’s attention in the past four years .
u We want IsDB to be at the frontier of development — able to foresee needs and challenges ahead of the pack and to shape new frontiers for sustainable growth in areas where MCs can definitely achieve comparative advantage .
u We want IsDB to be proactive — able to act as a catalyst for advocating and promoting MCs’ common goals, mobilising resources for the neediest, and creating comprehensive development solutions that tackle not only the symptoms but also the root causes .
u We want IsDB to be fast and adaptive — able to deploy development financing quickly where needed while responding to emerging priorities as a single force, integrating the various arms and entities of the IsDB Group in a comprehensive manner .
To meet these expectations, IsDB Group embarked on a strategic corporate transformation programme in order to emerge as a more efficient, agile and catalytic organisation . The Group has undertaken many important rationalisation initiatives, thinking expansively and differently about the relationships between operating costs, financial BUILDING AN AGILE profitability, development impact and human well-being . ORGANISATION
[ 147 ] Growing sustainably
[ 148 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
[ 149 ] SDGs
Financial Sustainability Model
he Financial Sustainability Model (FSM) aims to support the implementation of the 10YS T and the P5P while keeping IsDB financially sustainable
X The new model fully integrates with PURPOSE The Financial IsDB’s internal systems infrastructure X In response to the financial crisis in Sustainability Model and provides more powerful and dynamic 2008, MDBs responded with a scaled-up can calculate the scenario analysis capability. financing package to their MCs. maximum of new METHOD X IsDB reported a linear annual growth in business projects its approvals to scale up financing to MCs. X The FSM provides 10-year projections This growth continued and led eventually manageable by IsDB for financial statements and prudential to multiplying IsDB-approved financing per ratios through a detailed bottom- year beyond its means and capacity. The at any one time, up approach using a predetermined scale-up led to deterioration of key financial given the various methodology to calculate the maximum ratios (including risk-adjusted capital, of new business projects manageable by among others). operational and IsDB at any one time, given the various financial constraints operational and financial constraints. X Consequently, over US$ 20 billion of This information is used as input into the commitments, coupled with a low pace Integrated Work Programme to set the of disbursements, led to a major financial commitment capacity and prevent negative strain that put IsDB’s AAA-rating at risk. effect on the balance sheet.
X When the FSM initiative was launched X The FSM is a platform which brings in 2017, it was estimated that IsDB could together all aspects of IsDB’s business face a rating downgrade in 2019. This risk model, including operations, investments would have been imminent had IsDB not and resource mobilisation. It does this in a proactively tackled it in 2017. unified and consolidated manner under one umbrella to help monitor IsDB’s key financial risk indicators and long-term sustainability through reliable forecasts of scenarios under both normal and stressed conditions.
X The model provides IsDB with the cost benefit analysis of implementing any risk mitigation plan.
X The FSM was developed and designed through a rigorous mapping process after careful consideration of the various interlinkages between individual projects/ investments and their implications at the portfolio level.
X Designed to help management evaluate new strategic initiatives, the FSM considers interlinkages between the various business activities and their implications on IsDB’s balance sheet.
[ 150 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
X A detailed quantitative assessment based on IsDB’s growth strategy has been undertaken, to determine the envelope of the 6th General Capital Increase.
X The financial and capital implications of various new products and initiatives have been assessed.
INVESTMENT X IsDB’s investment in an enhanced IT system infrastructure enables the necessary input to run the FSM.
X Capacity building for senior management and internal stakeholders is included in the periodic updates.
X US$ 17,000 have been invested to validate the model’s soundness and alignment with market standards by an external expert.
ISDB RATING
X The FSM is being enhanced as X The extent of approvals and 4 credit rating agencies a standalone application with more disbursements headroom is advanced functionalities and better successfully provided each year in have, each year, confirmed security. line with the Financial Sustainability Strategy. IsDB’s AAA rating since ACHIEVEMENTS X The liquidity and funding the development of the FSM Rating requirements are calculated and X Four credit rating agencies have, monitored, allowing IsDB to conduct each year, reaffirmed IsDB’s AAA a financially sustainable business rating since the development of the under both normal and stressed FINANCIAL SUSTAINABILITY FSM. (such as the COVID-19 crisis) market conditions. The FSM provides the X Key prudential ratios, including capital adequacy and leverage, are X Recommendations are provided analytical framework maintained within the prescribed to optimise the operations financing internal thresholds and AAA rating portfolio and manage IsDB’s to ascertain IsDB’s requirements. commitments at acceptable levels.
Monitoring and oversight Strategic initiatives medium- to X Quarterly status updates on X The development of strategically financial IsDB’s financial standing are important financial policies, such as long-term provided to the Board of Executive the Liquidity Policy and Operations sustainability Directors and senior management to Overdues Policy, is supported implement corrective measures in a through elaborate quantitative timely manner. assessment.
[ 151 ] SDGs
First IsDB Green Sukuk
he launch of IsDB’s debut Green Sukuk reaffirmed IsDB’s commitment to play a T catalytic role in the global Islamic capital market
X The asset-based Islamic Trust PURPOSE The 2030 Certificates will finance SDG sectors in X Globally, the issuance of labelled bonds Development IsDB’s MCs through innovative financing for reached around US$ 1 trillion in 2019, with Agenda demands a total of 11 projects in: green bonds accounting for an aggregate – Renewable energy 77% of this market and marking a new the creation of – Clean transportation global annual record in 2019, with US$ 258 alternative financing – Energy efficiency billion worth of issuances. Green Sukuk – Pollution prevention and control issuances reached approximately US$ 3 instruments to bridge – Environmentally sustainable billion in 2019, representing 1% of the global management of natural living resources green bond issuances. the funding gap in and land use global SDG financing. – Sustainable water and wastewater X IsDB entered the green bonds market by management. issuing its first Green Sukuk in November IsDB’s Green 2019, for a value of € 1 billion. This Sukuk provides an X The initiative will serve to further diversify initiative reaffirmed IsDB’s longstanding IsDB’s funding sources by raising financing commitment to play a catalytic role in innovative financing for ‘green’ projects in MCs, thereby helping to the global Islamic capital market with instrument towards address gaps in SDG financing. As a result, innovative financing solutions, in order to the profile of IsDB as a green issuer received a help MCs to achieve the SDGs. this end massive boost in hitherto untapped financial markets. This also meets the requirements of the Awareness track of the P5P.
METHOD X IsDB’s new business model focuses on leveraging innovative Islamic finance to strengthen the capacity of MCs as they work to attain the SDGs. The introduction of the Green Sukuk is in keeping with these aims and values.
X The Sukuk Trust Certificates were classified as ‘green’ according to the Green Bond Principles (GBP) set by the International Capital Market Association.
X The certificates were purchased by institutional investors.
X The issuance raised a total of € 1 billion from the investors in return for the certificates. This amount was then fully committed for financing or refinancing a total of 11 green projects in the categories outlined above.
[ 152 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
INVESTMENT X The € 1 billion mobilised by Green Sukuk will be exclusively directed to projects tackling various SDG sectors in MCs. The returns are long- term and intangible, as the issuance: – Raises IsDB’s profile as a ‘financier of development’ with a focus on the SDGs – Shows how Islamic financing instruments can play an important role towards SDG financing.
X The initiative has helped IsDB to secure new investors from the environment, social and governance (ESG) and socially responsible investments universe, especially from Europe and Japan.
GLOBAL ISSUANCE OF SUSTAINABLE BONDS X The launch of IsDB’s debut Green achieving a medium green Sukuk reaffirmed its well-established shading, which is in line with other Around commitment to play a catalytic role sovereign supranational agencies, in the global Islamic capital market including IFC, KfW and MuniFin. with innovative solutions that help US$ 1 trillion MCs to achieve the SDGs. ACHIEVEMENTS in 2019, with green bonds X Targeted investment is designed X The IsDB Green Sukuk is the first accounting for 77% of to ensure that specific SDGs are AAA-rated Green Sukuk in the world. attained through IsDB interventions this market in MCs. X IsDB achieved the lowest ever profit rate for its Sukuk. X IsDB’s Sustainable Finance Framework is aligned with the X A European central bank ISDB GREEN SUKUK International Capital Market purchased the Green Sukuk. Association’s GBP, Social Bond IsDB issued its first Green Principles and Sustainability Bond X The initiative is in line with the Guidelines. This has allowed IsDB to: aims of IsDB’s P5P and new business Sukuk in November 2019, – Issue Green, Social and model by ensuring growth for IsDB Sustainability Sukuk under its funding objectives. raising – Achieve its first ESG Risk Rating from Sustainalytics, with a strong X The market profile of IsDB low risk score of 11.5% out of 100% as a green issuer has received € 1 billion – Secure a favourable second party a considerable boost, enabling opinion for IsDB’s Sustainable it to reach previously untapped Finance Framework from CICERO, categories of investors.
[ 153 ]
SDGs
Project Financial Management Policy Framework
inancial management is an integral part of the public sector development process, ensuring F accountability and efficiency in the management of MC resources . IsDB has devised a robust set of project financial management guidelines to support its work
X IsDB’s Project Financial Management PURPOSE Within IsDB’s new Policy Framework (PFMF) has four core X Project-level financial management decentralised objectives: due diligence is crucial during project ecosystem, the – To ensure the quality of project financial preparation to ensure that project management throughout the project’s implementation arrangements properly Project Financial cycle reflect the capacities and capabilities of the Management – To contribute to providing reasonable beneficiaries. assurance on the use of IsDB’s funds Policy Framework – To support MCs in enhancing their X At an operational level, project financial financial management performance and management underscores the need is facilitating capacity, and promote efficient project to enhance quality-at-entry in all IsDB- more intensive implementation financed projects. – To harmonise FM practices with other engagement with MDBs and FIs. X IsDB commits to ensuring that project- MCs through the level teams in the projects it funds are METHOD equipped to assist beneficiaries with the Regional Hubs development of sound project financial X To achieve the objectives outlined management systems. This includes above, IsDB recently completed the familiarising project stakeholders with development of the PFMF, which sets IsDB’s financial management policies various principles that govern IsDB’s and procedures through liaison with the financial management in MCs. responsible field staff. X The PFMF is founded on a risk-based approach and requires that key project financial management risks are adequately assessed and further identified as inherent, control and residual risks. These three types of risks must be adequately monitored during project implementation.
X The PFMF is underpinned by six guiding principles that oblige IsDB’s project staff to take an active role throughout the entire project cycle as members of the project teams. It enshrines seven key principles, which are summarised as follows: – Principle 1 — IsDB requires the financing agreement to stipulate that the recipient and implementing entities of financed projects maintain financial management systems acceptable to IsDB – Principle 2 — A risk-based approach will be followed by IsDB in assessing,
[ 154 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
journey with the aim of properly X Outcomes in 2019 include: managing resources to achieve the – 100% financial management intended development results. Key assessment exercises undertaken areas of focus include: for the new projects, with the aim – Planning of ensuring the use of funds for – Budgeting the intended purposes – Accounting – 100% review of projects’ financial – Financial reporting audit reports, allowing the – Internal control detection and remediation of – Auditing arrangements projects’ financial issues. – Funds flow management.
INVESTMENT X IsDB is committed to ensuring that its operations and activities are X The PFMF is designed to achieve governed by strict rules, procedures two main objectives: and guidelines aimed at achieving: – Improve country PFM – Regularity performance as a key contributor – Transparency to successful development – Integrity – Apply appropriate fiduciary – Legality. arrangements to the financial support that IsDB provides to its X The project financial MCs. management role spans all IsDB- financed projects, covering: – Project identification – Preparation identifying and categorising risks – Appraisal – Principle 3 — IsDB’s PFM – Implementation KEY PRINCIPLES requirements must be reflected in – Completion. the country’s MCPS Country systems will be – Principle 4 — IsDB will facilitate ACHIEVEMENTS the implementation of its Anti- used to operationalise Corruption Policy to combat the X The PFMF document: risk of fraud and corruption in – Addresses financial management the aims of the Paris project financing risks in IsDB-financed projects – Principle 5 — There will be – Works in the context of IsDB’s Declaration, the compliance with Anti-Money new operating model and Laundering, Combating Financing incorporates best practices from Accra Agenda of Terrorism and Know Your other MDBs and FIs Customer Policy – Enables IsDB to work with global for Action – Principle 6 — PFM practices partners to build sustainable will be harmonised with those of financial management capacity and the Busan other donors and harmonise donor practices – Principle 7 — Country systems within MCs. Partnership will be used, where the capacity is adequate to operationalise the X The PFMF enables policy and aims of the Paris Declaration, the strategy discussions and informs Accra Agenda for Action and the investment choices and other REVIEW OF PROJECTS Busan Partnership. support to MCs. of financial audit X IsDB tailors its PFM activities X IsDB’s approach to the PFMF 100% to the quality and capacity of the reinforces the MCPS approach reports received beneficiary’s financial management through a ‘Whole IsDB Group’ systems. IsDB’s PFMF brings principle. together all aspects of the funding
[ 155 ] SDGs
Green finance accreditation
roviding an enabling infrastructure for green value chains and building resilient market systems are key Pelements of the P5P . IsDB therefore actively pursues accreditation with global institutions that support preparation and financing of green infrastructure projects
X Working with leading international PURPOSE The major financing organisational partners and seeking their X The P5P envisages the transformation need falls onto accreditation will ensure attainment of of IsDB from a sovereign financing bank infrastructure these goals. For instance, GIF’s experience towards an institution able to catalyse in project preparation and GCF’s capacity private financing for developmental projects that can to fund green infrastructure assets are projects. The philosophy of the P5P is connect local essential for strengthening IsDB’s value centred around creating markets for GVCs. proposition in this domain. The participation in these global markets industries to GVCs. requires the creation of capital-intensive METHOD infrastructure projects that can connect Green finance local industries to GVCs. accreditation has The Global Infrastructure Facility X IsDB will partner with GIF to benefit X To achieve its goals, IsDB needs to a crucial role to from its abundant experience in structuring build partnerships with global players that play in making bankable infrastructure projects and provide know-how and financing for green mobilising funding for project feasibility infrastructure. Since mid-2019, IsDB has this possible in a analyses and preparation. been engaged in close discussion with sustainable way the Global Infrastructure Facility (GIF) and X GIF is a partnership among the Green Climate Fund (GCF), expediting governments, MDBs, private sector IsDB’s accreditation with both entities and investors and financiers, and is designed exploring avenues for collaboration during to provide a new way of collaborating on the accreditation process. preparing, structuring and implementing complex projects that no single institution could handle on its own.
X GIF supports governments in bringing well-structured and bankable infrastructure projects to the market. Project support can cover the spectrum of design, preparation, structuring and transaction implementation activities, drawing on the combined expertise of the organisation’s technical and advisory partners and focusing on structures that are able to attract a wide range of private investors.
X Housed within the WB, GIF serves as a centre of excellence for preparing infrastructure projects in developing economies. Working closely with its technical partners such as MDBs, it provides funding and hands-on technical expertise for designing and structuring projects that are attractive to private sector investors.
[ 156 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
X Since its inception, GIF has US$ 10.3 billion. These funds come roadmap for collaboration between approved 88 activities in 46 mainly from developed countries, the two institutions which details countries, which are expected to but also from some developing various areas of cooperation with mobilize US$ 69 billion in total countries, regions, and one city. identified deadlines to achieve investments, including US$ 46 billion tangible outcomes. from the private sector. About 21% of X GCF’s activities are aligned GIF’s approved funding targets least- with the priorities of developing INVESTMENT developed countries. countries through the principle of country ownership, and the GCF has X As an accredited technical X Many GIF projects contribute to established a direct access modality partner, IsDB will benefit from a SDG 7 (Affordable and Clean Energy) so that national and subnational variety of GIF products covering and SDG 13 (Climate Action). More organisations can receive funding the whole spectrum of project than 45% of GIF-approved funds directly, rather than only via preparation and financing process are for energy and almost 70% for international intermediaries. starting from a programme climate-smart projects. definition/enabling environment, X The GCF pays particular attention including project preparation/ The Green Climate Fund to the needs of societies that are investment feasibility as well as X As an accredited partner of the highly vulnerable to the effects of transaction design/implementation GCF, IsDB will attract financing for climate change, in particular Least and post-transaction financing. green infrastructure projects in its Developed Countries, SIDS, and MCs while ensuring that identified and African States. X Once accredited with the GCF, structured projects are aligned with the IsDB will be able to mobilise funding requirement for green infrastructure. X GCF aims to catalyse a flow of for initial analyses of projects through climate finance to invest in low- the Readiness and Preparatory The GCF is the world’s largest emission and climate-resilient Support Programme and to attract dedicated fund helping developing development, driving a paradigm financing for bankable infrastructure countries to reduce greenhouse gas shift in the global response to projects once they reach the market. emissions and enhance their ability climate change. to respond to climate change. Set up by the United Nations Framework X GCF’s innovation is to use public GLOBAL INFRASTRUCTURE Convention on Climate Change in investment to stimulate private FACILITY 2010, the GCF has a crucial role finance, unlocking the power of in serving the Paris Agreement, climate-friendly investment for More than 45% of supporting the goal of keeping low emission, climate resilient average global temperature rise below development. To achieve maximum GIF-approved funds are for 2°C. It does this by channelling climate impact, GCF seeks to catalyse funds, finance to developing countries multiplying the effect of its initial energy and almost 70% that have joined other nations in financing by opening markets to new committing to climate action. investments. for climate-smart projects
X Responding to the climate ACHIEVEMENTS challenge requires collective action GREEN CLIMATE FUND from all countries, including by X IsDB has already started sharing both public and private sectors. experience and knowledge with GIF Among these concerted efforts, and the GCF in anticipation of closer The GCF launched its initial advanced economies have agreed to collaboration in the near future. A jointly mobilise significant financial knowledge session on GIF products resource mobilisation in resources. Coming from a variety of and instruments was conducted sources, these resources address the at the IsDB HQ in February 2020. 2014, and rapidly gathered pressing mitigation and adaptation GIF Head, Mr. Jason Lu, made a needs of developing countries. presentation to IsDB staff and held pledges worth meetings with IsDB management. X The GCF launched its initial US$ 10.3 billion resource mobilisation in 2014, and X In November 2020, IsDB and the rapidly gathered pledges worth GCF concluded discussions on a
[ 157 ] SDGs
Global Value Chains Community of Practice
sDB’s GVC Community of Practice addresses the issues of capacity building, training and I knowledge transfer within IsDB to position it as a global knowledge institution
PURPOSE The efforts to build METHOD X GVCs are central to IsDB’s work expertise in GVCs X In May 2019, IsDB President issued an approach and are fundamental to its new for a successful administrative decision establishing the business model and the P5P. Global Value Chain Community of Practice implementation of for (GVC-CoP). Since then, the GVC-CoP X Given the novelty of the new area of IsDB’s GVC-based has made significant progress in its skills and practice in IsDB, the need has mission to build staff capacity in GVCs for arisen for: MCPS are enabling the benefit of MCs. – Supporting capacity building – Raising awareness and providing active IsDB to achieve its X The GVC-CoP aims to mainstream the knowledge exchanges. objective of helping GVC approach as the new development model of IsDB. X Hence IsDB established a Community of MCs reach their Practice (CoP) as an indispensable tool to: development goals X The GVC-CoP rests on three key pillars: – Build staff capacity in GVCs – GVC certification training – Build and maintain GVC knowledge – Knowledge sharing sessions transfer at IsDB for the benefit of MCs – Online exchange of ideas. – Position IsDB as a global knowledge institution. X More than 250 IsDB staff members have applied for GVC-CoP training, which shows a willingness among staff to assist in implementing the core principle of the P5P — making markets work for development.
ACHIEVEMENTS X Key milestones of GVC capacity building for IsDB staff through the GVC-CoP include the following: – 260 staff members have applied for GVC-CoP certification – 100 staff members have been trained in GVCs – 10 staff members are expected to be certified by the end of 2021 and would be expected to conduct full in-the-field GVC analysis in MCs under the MCPS.
X IsDB has successfully participated in many GVC-CoP knowledge exchange sessions with keynote events, including: – ‘GVCs: Prospects for Shared Prosperity’, with a presentation by Dr Muhammed Abdul Khalid, former Economic Adviser
[ 158 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
– The Textiles and Apparel GVCs – Turkey in the Textiles GVC – Bangladesh in the Apparel GVC
– The Mining and Petrochemicals GVCs – Guinea in the Bauxite Aluminium GVC – Senegal in the Petrochemicals GVC
– The Agri-food GVCs – Turkey in the Fresh Fruit and Vegetables GVC – Nigeria in the Cocoa-Chocolate GVC – Indonesia in the Cocoa-Chocolate GVC
– The Automotive GVCs – The Evolving Automotive GVC – Turkey in the Automotive GVC – Indonesia in the Automotive GVC.
GVC CAPACITY BUILDING FOR ISDB STAFF
260 staff members have applied for GVC-CoP to the Prime Minister of Malaysia, in various T20 activities and Dr Mahathir Mohamad. The published T20 papers certification session was officiated by IsDB – The first GVC-CoP certification President ceremony was organised in – ‘GVCs: Opportunities for January 2020. A second award Transforming African Economies’, ceremony was conducted on 6 100 staff members have featuring speaker Prof. Peter June 2021. Draper, Executive Director, been trained in GVCs Institute of International Trade, INVESTMENT University of Adelaide, Australia. X IsDB’s investment in GVC-CoP X In addition, under the GVC-CoP activities has led to the preparation 10 staff members are umbrella: of an important book on the – GVC-CoP secretariat members subject, entitled Rebuilding Inclusive expected to be certified participated in the Kingdom of Global Value Chains as Pathway to Saudi Arabia’s G20 activities with Global Economic Recovery, written during 2021 and will conduct T20 collaborations exclusively by IsDB staff. – The GVC section staff GVC analysis in MCs under represented IsDB at the G20 1st X The book was launched and Trade and Investment Working published on 6 June 2021, and the MCPS Group Meeting in March 2020 contains several GVC reports on key – GVC section staff participated industries in MCs, including:
[ 159 ] SDGs
Sustainable Development Goals Community of Practice
he 17 SDGs provide IsDB with a comprehensive set of goals related to various economic T sectors and cross-cutting development areas in MCs . A specialist Community of Practice is helping IsDB in this regard
PURPOSE The SDGs-CoP has METHOD X IsDB has been working closely with represented IsDB at X In order to mainstream the SDGs, IsDB its 57 MCs to support them in achieving various international appointed in 2017 the President’s Special the SDGs. IsDB’s commitment to these Envoy on the SDGs and set up a specialised goals is further strengthened by their events, promoting Community of Practice (the SDGs-CoP). general consistency with Islamic principles, the role of IsDB particularly in the context of alleviating X The SDGs-CoP encompasses three poverty, restoring the dignity of people, as a key player in work streams: raising awareness among taking care of the planet and maintaining IsDB staff on the SDGs, ensuring alignment prosperity for all living beings. achieving the SDGs of IsDB’s work with the SDGs, and enhancing advocacy about IsDB’s work on X Shortly after adoption of its 10YS, IsDB the SDGs. launched the P5P, which articulates a bold roadmap to improve IsDB’s efficiency X It also provides IsDB professionals and effectiveness towards achieving with the opportunity to express their better development outcomes for MCs. professional views freely through In particular, IsDB is being transformed appropriate platforms and expand their from a ‘financier of development’ to a horizons with respect to development ‘Bank for development and developers’. issues by connecting them to experts from As part of this process, it is widening its across the globe. scope of activities to help its MCs solve the challenges of the SDGs. X The SDGs-CoP has formulated two main communication platforms through which it is supporting awareness, alignment and advocacy workstreams on the SDGs, in addition to a web platform:
X The SDGs Digest is a quarterly newsletter that provides a platform for in- house professionals as well as those from development partners to share project- related experiences, expertise and lessons learned, research-based activities related to the SDGs, and insights on issues related to the achievement of Agenda 2030 for Sustainable Development.
X The SDGs Open Dialogue is a seminar to which eminent personalities are invited as guest speakers. They provide their insights, research findings and expertise from the field on the SDGs and engage in open debate with IsDB professionals and guests from partner institutions.
[ 160 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
X The SDGs-CoP website is Envoy on Financing the 2030 Agenda INVESTMENT continuously enhanced to serve as for Sustainable Development; Mr a repository for all the knowledge Achim Steiner, UN Development X The SDGs-CoP will continue to products developed through the Programme Administrator; Prof engage with IsDB professionals platforms of the SDGs-CoP and Jeffrey Sachs, Director of the Center through the SDGs Digest and the external knowledge sources on for Sustainable Development, SDGs Open Dialogues. SDGs. The website also contains Columbia University; Prof Dr Murat blogging and online discussion Yulek, Rector of OSTIM Technical X In addition to these platforms, spaces where professionals University and author of the Book the SDGs-CoP will soon launch can write about and have virtual How Nations Succeed; and Prof Asim a new more frequent series of discussions on topics related to the I. Khwaja, Director of the Center for events called the SDGs Brown SDGs in particular, and development International Development, Harvard Bag Sessions, which will provide in general. Kennedy School. professionals with a platform to dive deeper into more specific SDGs and X The SDGs-CoP has collaborated development-related topics. The aim ACHIEVEMENTS in the development and organisation is to bring professionals together X So far, 13 issues of SDGs Digest of various high-profile events. more frequently to hold more topical have been published that feature For example, along with the and technical discussions and contributions from more than 120 UN Development Programme collaborations. authors from across the IsDB Group (UNDP), the UN Economic and and development partners. The Social Commission for Western X The SDGs-CoP will also enhance articles cover a wide range of topics Asia (UNESCWA) and the Inter- its website in order to provide a one- on all the SDGs, in particular those Parliamentary Union, the SDGs-CoP stop shop to access SDG-related that affect development areas such as was co-developer of the Capacity topics and knowledge sources as climate change, youth and women’s Development Programme for Arab well as a resource to reach out to development, poverty alleviation, Parliamentarians on the SDGs. experts on individual SDGs within agriculture and food security, health, IsDB. education, and SDGs financing. X IsDB has also co-organised two regional forums under this X A total of 13 SDGs Open programme. The first was held Dialogues have been organised in Beirut in January 2019 and the SDGs OPEN DIALOGUES over the past three years in order second was co-organised online in to discuss important topics on all November 2020. 13 SDGs Open Dialogues 17 SDGs. These include events held in partnership with a diverse X The SDG-CoP has engaged in have been organised over the array of eminent personalities a wide variety of events, including and global experts such as Ms. United Nations high-level political past 3 years Amina J. Mohammed, Deputy forums, international forums of Secretary General, United Nations; development partners and IsDB Dr Mahmoud Mohieldin, UN Special Annual Meetings.
[ 161 ] SDGs
Member Country Partnership Strategy 2.0
nternational production, trade and investments are increasingly organised within GVCs, with Ithe various stages of the production process located across different countries . These are of central importance to competitive performance for our MCs
be able to connect to value chains and PURPOSE IsDB aims to that industrial policy should be targeted at X Development finance falls short of become a global hub enabling this sort of inclusivity. the financing gap identified by the SDGs. of analytical and To meet the SDGs, IsDB MCs need to X The new IsDB business model, ‘Making crowd-in market resources by reorienting de-risking financial Markets Work for Development’, is designed development programmes to tap into their instruments that to reorient development operations to drive current areas of competitive advantage as the competitiveness of MCs’ strategic a starting point. They can then use that to connect market industries and connect them to GVCs expand their added value. players to their X IsDB is committed to continuing its X Resource-rich countries that are able potential clients and investment in infrastructure projects that to ensure added value along GVCs are financiers globally raise the efficiency and performance of well-placed to thrive in this system. IsDB the market players and value chains in its believes that all countries, including those MCPSs. This includes playing an active that do not have natural resources, should role in project sourcing to improve the quality of projects and attract private sector participation for maximum impact.
X There are sustainability gains to be made by addressing infrastructure challenges in sectors that are known for their high impact on the environment. In this connection, IsDB has identified a need to define growth targets based on actual resources transferred to MCs, rather than only on approvals. It has also identified the need to manage operating plans for internal resources while considering long-term financial commitments and looking for potential co-financiers.
METHOD XIsDB’s new business model and, in particular, the P5P focus on how to add economic value in strategic competitive industries connected to GVCs. IsDB uses GVCs to help it prioritise projects in a way that targets all players in a specific value chain.
X Based on GVCs, the recently launched MCPS 2.0 draws on the principles of the P5P to support MCs. It is intended to
[ 162 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
The share of the MCPS allocations will be increased from 20% in 2020 to 80% in 2022.
INVESTMENT X The COVID-19 pandemic has presented particular challenges to MCs, requiring many of them to reposition themselves on their GVCs to mitigate the impacts of the crisis. IsDB’s 57 MCs include many of the world’s fastest-growing economies. With a combined GDP of approximately US$ 7 trillion and historical GDP growth rates of up to 8% per year, they have strong potential not only for recovery but also for continued growth.
X The MCPS strategy has paved the way for IsDB to align its programming with MCs’ needs. function as a tool that can be used X To maintain competitiveness, Currently, there are 11 GVC-based to develop IsDB's project pipeline countries need to meet the new MCPSs at various stages of through proactive needs assessment. levels of productivity achieved processing. We keep a tight rein on through Industry 4.0. The MCPS administrative expenses and monitor X MCPS 2.0 allows IsDB to prioritise 2.0 framework identifies priority costs against the promised financial its projects in areas with highest interventions that help shift countries benefits of programmes. impact and, at the same time, towards this fourth generation of provide greater opportunity for industrialisation. X IsDB will continue to support its countries to be interconnected. In MCs as they manage the short- to this way, it can achieve the objectives medium-term risks while working to ACHIEVEMENTS of creating sustainable employment, increase their market share in GVCs. boosting industrial innovation levels, X There has been significant and crowding-in resources from all progress with the implementation market players. of the MCPS 2.0 approach, which has replaced the previous way of X MCPS 2.0 is an important part formulating the MCPS. of IsDB’s approach to support MCPS 2.0 INITIATIVES its MCs in meeting the SDGs. X In 2019, four MCPS 2.0 initiatives Meanwhile, IsDB’s Regional Hubs were launched (Gabon, Maldives, are at the forefront of proactive Morocco and Turkey) of which Gabon, Turkey, needs assessment of MCs, providing those of Gabon and Maldives regular dialogue to focus investment have already been formulated and Morocco, Maldives, on areas that have high potential for the remaining two are still under growth, employment generation and formulation. In addition, seven Senegal, Malaysia, sustainable human development. more are being formulated in 2021 (Guinea, Indonesia, Malaysia, Nigeria, Indonesia, Guinea, X IsDB has committed to an Pakistan, Saudi Arabia and Senegal). industrial transformation by helping Saudi Arabia, MCs move into higher value-added X IsDB has also set up RL Pakistan, Nigeria products with strong backward and operations in eight MCs, with a view forward linkages based on higher to supporting SSTrC among MCs for complexity as well as STI. various development programmes.
[ 163 ] SDGs
Cash Waqf Sukuk
sDB has developed its Cash Waqf Sukuk and Ihsan Waqf Investment Fund as innovative financing Imechanisms that aim to mobilise resources for MCs in a Shariah-compliant manner based on the temporary cash waqf principle
X The Ihsan Waqf Investment Fund (IWIF) PURPOSE Cash Waqf Sukuk is a resource mobilisation instrument that X Cash Waqf Sukuk (CWS) is an Islamic and Ihsan Waqf aims to pool capital from philanthropists finance product that aims to pool capital Investment Fund (benefactors) into a fund to be managed from sukuk subscribers (benefactors) both externally over a period of 10 years as well. high-net-worth individuals and members of demonstrate IsDB’s the public. proactiveness in METHOD X CWS aims to be the source of funding utilising Islamic X A unique feature of CWS is that the for several poverty alleviation programmes profit generated from investing the sukuk developed under the auspices of ISFD. finance instruments proceeds is directly channelled towards to achieve poverty alleviation programmes rather X CWS achieves this by providing a than paid to the benefactors. It is a form of regular stream of income over a 10-year development targets social impact sukuk whose sole objective period towards the implementation of these is to look for interested benefactors who initiatives in IsDB MCs. would like to provide waqf (endowment) in the form of cash.
X The tenure of CWS is 10 years, after which subscribers/benefactors may redeem the sukuk, who have also the option to make their contribution permanent.
X IWIF is a resource mobilisation instrument that aims to pool capital from benefactors through an externally managed fund to be used over a period of 10 years, that is also based on the temporary cash waqf principle. It is designed to pool temporary cash waqf from benefactors, with the proceeds/profits from the invested capital used to support IsDB poverty fighting programmes.
X Upon maturity, the capital is either returned to its owners or kept on permanently, depending on each benefactor’s decision regarding the portion corresponding to their initial investment.
ACHIEVEMENTS X Each of the IWIF funds is expected to generate a return of 6–10% annually
[ 164 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
— 250 million on the US$ 2.5 billion expected capital — a potential return of US$ 2.5 billion over 10 years.
X The first of which is the US$ 100 million for Al-Quds Empowerment Fund which will generate approximately US$ 60 million over 10 years, to be spent on poverty- alleviation projects and programmes in Palestine. depending on the risk profile public. Other means could be used associated with each. at later stages like crowdfunding IHSAN WAQF INVESTMENT FUND platforms, blockchain or other X The first fund, IWIF for Al-Quds internet-based resource mobilisation Each of the IWIF funds is Empowerment, for US$ 100 million tools. Minimum subscription in this — seeded with US$ 20 million category is set at US$ 100. expected to generate a return from ISFD — was established in September 2019 following approval X The target for CWS is to initially of 6–10% annually by ISFD Board of Directors. Several raise US$ 500 million, with a first other IWIF funds are expected to issuance of US$ 200 million. be established over the next couple CASH WAQF SUKUK of years for US$ 250–500 million, X CWS as a product has been well as part of a US$ 2.5 billion funds received by the Dubai Financial programme for the coming five years. Services Authority and will be The target for CWS is to raise listed on the Nasdaq Dubai stock exchange, which will be a major INVESTMENT US$ 500 million partner in the issuance of CWS. X Funding for the CWS is collected with a first issuance of via the capital market, targeting X Several IWIFs are expected to high-net-worth individuals, be established over the coming few US$ 200 million financial institutions, corporates years and would generate an average and interested members of the return of 6-10% annually or US$ 150
[ 165 ] Managing for results
[ 166 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
[ 167 ] SDGs
Integrated Strategic Programming Framework
sDB has designed an Integrated Strategic Programming Framework (ISFP) which aims to integrate Istrategy, finance and operations in the planning processes . The ISPF-based planning process results in a rolling three-year Integrated Work Programme (IWP) that provides a unified view of IsDB’s resource allocation with its strategic priorities . The ISPF encapsulates cascading of the P5P via corporate KPIs across all business units
X The ISPF, which has been running for PURPOSE The ISPF four years, aims to ensure that strategy X IsDB’s 40-year assessment and the ensures that the is embedded in IsDB’s operations and subsequent 10-Year Strategy Framework administrative administrative work programming by highlighted IsDB’s key achievements having a cohesive approach across while also identifying major areas of budget is allocated strategy, operations, finance and budgeting. improvements, including the following: strategically to Four cycles have been completed based on – IsDB’s approach to interventions and this methodology. assessment of critical MC needs should support operations in become more proactive METHOD – Project selection should be better MCs for an effective aligned with development gaps in MCs and efficient X The ISPF is primarily designed to – Resource allocation should be linked address the key improvement areas to strategy, by ensuring robust target results delivery. identified for programming. It is being setting and cascading strategic This allows the expanded to cover IsDB Group entities priorities. to synergise all investments on both efficient allocation operations and administrative aspects. The X To address the above key shortfalls, the of resources in the ISPF-based planning process produces a P5P introduced an integrated approach to rolling 3-year Integrated Work Programme planning. This necessitated the adoption impactful areas for (IWP) that provides a unified view of IsDB’s of an Integrated Strategic Programming MCs resource allocation with its strategic Framework (ISPF). priorities. Broadly, the IWP covers: – Proactive assessment to identify current and future needs of MCs, and effectively set IsDB’s transformation agenda for these MCs – Ensuring impactful project selectivity through a Project Qualification and Prioritisation (QnP) matrix that aligns project selection with MC needs and IsDB priorities – Linking strategy and resources (i.e. operations financing and administrative budget), ensuring robust target setting and cascading of priorities, a comprehensive and collaborative approach to planning, linking of resource requirements to targets, and result monitoring.
X The strategic planning approach has gone through an iterative realisation process of ISPF components as follows:
[ 168 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
– Linking urgent response to the longer-term challenges of Agenda 2030 – Ensuring business continuity of ongoing commitments throughout the next IWP period and beyond.
X The ISPF provides a parallel execution framework whereby the classic model is gradually phased out and the new business model is phased in. This provides MCs with all the typical project financing along with a suite of new financing schemes that leverages – 2018 marked the beginning of the Transform Fund for STI; Country IsDB synergies. In addition, going journey by linking the budget to Platforms, formerly known and forward, all IsDB’s interventions will the strategy approved as Regional Infrastructure take a programmatic MCPS-driven – 2019 marked the mainstreaming Supranational Entities; COVID-19 approach where projects are targeted of the Proactive Needs Guarantee Facility; and the DEFAI. more precisely towards maximising Assessment component job creation, diversified exports/ – 2020 marked the mainstreaming X Other initiatives include value-add, and foreign investment. of the Ensuring Impactful governance enhancement Selectivity component. through the new BED committees, INVESTMENT comprehensive assessment and review of all IsDB funds, and a X The Operational Plan funding has ACHIEVEMENTS revised salary scale system. been increasing by US$ 0.5 billion X The ISPF Proactive Needs annually, reaching US$ 2.5 billion in Assessment process thus far has X More than 100 strategic initiatives 2021. set out a framework to build a vision are planned every year, as a result for how IsDB can contribute to of using the ISPF as a planning X The impact of the ISPF can the emerging global development model, which assesses the most also be seen in an encouraging agenda for 2030. The two key strategically aligned programmes. improvement in IsDB’s ratio of milestones of this process were internal administrative expenses the Board of Governors (BoG) X These concerted consultations per US$ 1 million approved, which Roundtables conducted on the side- and efforts by IsDB’s leadership fell to US$ 93,000 in 2020, from lines of the 2018 and 2019 Annual led to the new development US$ 128,000 in 2018. Meetings in Tunis and Morocco, model, “Making Markets Work for respectively. These roundtables Development”. To achieve MCs’ set a clear direction for IsDB on the development agendas for 2030, OPERATIONAL PLAN FUNDING key strategic priorities and principal especially within the emerging post- challenges for MCs and endorsed COVID-19 global context, the ISPF The Operational Plan funding IsDB’s new business model. The new provided the foundation needed to business model was based on IWP achieve a strategic reorientation of has been increasing by strategic planning processes to align IsDB with major sprints completed with MCs’ priorities as expressed by already and others currently the BoG. underway under the P5P. US$ 0.5 billion annually, reaching X Several initiatives were approved X The rollout plan of the new by the Board of Executive Directors business model balanced the trade- (BED) in support of the new direction, off of: US$ 2.5 billion including the GVC-based country – Giving an adequate response in 2021 programming; project preparation to the urgent post-COVID-19 facilities; IsDB Developers Platform; challenges
[ 169 ] SDGs
Global value chains analysis methodology
sDB’s GVC analysis methodology uses a filtering tool to identify champion sectors and products, helping Icountries determine and develop the sectors with the most potential
X The MCPS can then help countries PURPOSE IsDB’s GVC analysis expand and upgrade the industries that X Most IsDB MCs are raw material can help countries IsDB has identified as having the highest exporters. This is primarily due to identify champion potential. bottlenecks, capacity gaps and untapped product potentials that are holding them products that can METHOD back from achieving sustainable growth. yield improved If unlocked, these potentials can drive X To align markets with development comprehensive industrial transformation. returns across the programmes, it is important to focus on areas that are both promising and X The GVC analysis process considers entire value chain competitive and that offer inclusive the entire value chain of a country, from development solutions. the initial phase of production up to export and distribution to design a blueprint for X This approach, which can be described industrial transformation. as inclusive competitiveness, leverages markets and/or the private sector so that X The interventions derived from this countries can: process are then used to address GVC – Participate actively in development issues of individual countries’ leading programmes that boost market products/industries. competitiveness – Foster development by creating more inclusive development goals such as the creation of high-quality jobs and the promotion of sustainable export competitiveness. Based on comparative advantage of industry X To identify and subsequently develop Natural the sectors with the most potential that potential each country needs to focus on to achieve its high value-add increase and job creation targets, IsDB uses an analytical model Triangle of IsDB that helps uncover the industries in which value chain a country has an intrinsic competitive approach advantage through GVCs. Dynamic Surplus and X The model uses a filtering tool to potential spillover potential identify champion sectors and products of a country based on three criteria: – Natural potential, which takes into account the existing comparative Forward-looking approach Maximising value-added advantage of a country at the industry using projections and potential and interlinkages level indicators for future driven by forward and – Dynamic potential, which identifies and potential of products backward linkages quantifies the competitive advantage of products or goods according to future market conditions
[ 170 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
X The surplus and spillover potential evaluates the static added value of a particular industry and the interlinkages within different industries in a particular economy. It aims to: – Identify forward and backward linkages – Pinpoint potential spillover effects from interlinkages of industries – Maximise the value added in a specific industry.
INVESTMENT X The GVC analysis focuses on – Surplus and spillover potential, X The preliminary GVC analysis is potential industries with a revealed which measures the effects based on: comparative advantage (RCA). The on value-add and hence job – Revealed comparative advantage RCA index is used to determine the potential. This indicates upstream (natural potential) products in which a country has a and downstream linkages along – Future potential of products comparative advantage. with the induced effects that (dynamic potential) may result from interconnections – Value-add potential and X IsDB uses a Product Champion between industries. interlinkages driven by forward Index (PCI) to examine the industries and backward linkages (surplus and sectors that have the highest X Through this approach, countries and spillover potential). untapped potential for the country’s can focus on the GVCs of products future economic growth. for which they have a revealed X The three paradigms of comparative advantage. IsDB’s approach that guide the X The PCI identifies, at a quantitative tool for value chain disaggregated level, the highest- X After this identification process identification are described as potential products that a country can and in-depth analysis, GVCs are the Triangle of ISDB’s Value Chain produce to plug into the GVC. analysed to identify bottlenecks, Approach. capacity gaps and product potential X The RCA and PCI reflect the across the value chain. X The natural potential of a country potential champion products takes into account: in the industry that could guide X The interventions derived from – The existing comparative policymakers to integrate these this process will seek to address the advantage of the country at products in the GVC. gaps and bottlenecks in the GVCs industry level of each country’s leading products/ – A particular economy within industries. the economic structure and ANALYSING COMPETITIVENESS ecosystem that can efficiently THROUGH GLOBAL VALUE produce, relative to other CHAINS ACHIEVEMENTS countries in the world. X IsDB’s GVC analysis methodology A country’s champion sectors helps countries to achieve their X The dynamic potential takes a development targets by: forward-looking approach to identify and products are based on – Offering a systematic and quantify potential products or approach to assess countries’ intermediate goods that are potential natural potential, dynamic competitiveness and GVCs’ trade champion products by using potential indicators such as: potential, surplus and – Providing a framework within – Market growth which to analyse value chains – Global demand projections spillover potential in order to achieve industrial – Market distance deepening and upgrading. – Potential export concentration.
[ 171 ] SDGs
Environmental and Social Safeguards Policy
sDB has launched a targeted policy to address the environmental and social impacts of Idevelopment projects and programmes it funds
X Several factors indicate the need PURPOSE IsDB has joined for such a structured framework of X Environmental and social safeguards the major MDBs in best industry environmental and social play a critical role in helping countries safeguards: manage their assets, both human implementing an – Increasing size and complexity of IsDB’s and physical. They also help address Environmental and interventions reputational risk to MDBs. – Need to finance investments that fill Social Safeguards SDG gaps X Until recently, IsDB has either relied on Policy – ESG requirements of international rating the laws and regulations of the respective agencies. MC to mitigate the impacts of projects or has agreed to implement the environmental X IsDB has developed its first and social safeguards policies of co- Environmental and Social Safeguards financing development partners. Policy (ESSP), which enables it to: – Bring benefits to its MCs by taking X In keeping with other MDBs, all of necessary actions to access global which have formal operational policies grant resources related to environmental to assess environmental and social risks protection and adopt mitigation measures, where – Reflect global best practices necessary, IsDB decided to implement a – Reduce the reputational risks for project formal operational policy and structured sponsors and funders framework to consistently apply safeguards – Enable systematic analysis of available in its projects. data, identify options, engage actively with stakeholders, establish effective monitoring arrangements, and ensure high project quality at entry.
METHOD X The ESSP embodies the principle of proportionality and takes a flexible yet risk-based approach, allowing for the selective use of country systems and other development partners’ policies to support the achievement of the overall objective of enhancing sustainability and development effectiveness.
X The policy pillars on which the overarching goal of the proposed ESSP rests are: – Inclusiveness, through disclosure of information and consultation with and involvement of stakeholders in the overall decision-making process – Resilient development, by embedding
[ 172 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
resilience to address current and X In addition to the ESSP, two ESS – Updates to covenants of financing future social and environmental Standards (Environmental and Social agreements vulnerability of IsDB-financed Assessment and Management, and – Review and policy compliance interventions Land Acquisition and Involuntary mechanisms during processing – Leveraging resources, by Resettlement) have been developed, and implementation establishing sustainable together with an Environmental and – Accommodating an IsDB-wide partnerships to maximise Social Exclusion List. Together these due diligence process for the financing available for MCs. form a structured framework for Delegation of Authority Matrix. safeguards at IsDB. X The three policy enablers for INVESTMENT mainstreaming the ESSP in IsDB’s X The ESSP may be further operations are: expanded in future, potentially X IsDB’s ESSP enhances the – Identification of potential to include new ESS standards in investment standing of IsDB in the environmental and social risks operations, such as on indigenous following ways: and impacts of IsDB-financed peoples, labour, and introduction – By demonstrating IsDB’s unique interventions of an independent accountability situation as a Shariah-compliant – Integration of sound mechanism. MDB environmental and social – By enhancing IsDB’s global management plans into the position as an AAA+ MDB ACHIEVEMENTS project design to address – By enabling compliance with potential environmental and X By developing its ESSP, IsDB the ESG requirements of Fitch, social risks and impacts has joined all the other MDBs (ADB, Moody’s and S&P when issuing – Implementation of the agreed AfDB, AIIB, EBRD, EIB, IADB, IFC and Sukuk plans by the beneficiaries WB) that have such policies in place. – By ensuring it meets the for sustainable development It has also introduced a policy on accreditation requirements of the effectiveness. information disclosure, in line with GIF, GCF and GEF. the other MDBs. X The guiding principles of sustainability, proportionality and X The ESSP demonstrates IsDB’s risk management that underpin commitment to: the policy pillars and overarching – Address environmental and social goal are realised through an risks and impacts in a structured environmental and social operational framework across the management approach. project cycle – Ensure environmental and social X The ESSP will be implemented soundness and sustainability of ESSP GUIDING PRINCIPLES through IsDB’s newly decentralised investments business model. IsDB staff will – Support integration of The guiding principles of receive support for the following: environmental and social aspects – Implementation of the ESSP into the decision-making process sustainability, – Ensuring compliance – Provide public consultation and – Providing capacity development disclosure of information. proportionality services – Sharing knowledge and lessons X The introduction of safeguards and risk learnt. requires adjustments and fine-tuning in the business processes across the management X In the field, the Regional Hubs will project cycle, including: be supported through field-based – Preliminary review of are realised through an short-term consultants as required. environmental and social assessments during early environmental and social X An advanced and specialised phases of project programming/ training programme will be identification and preparation management approach implemented to enhance capacity of – Categorisation and development internal staff both at HQ and in the of required environmental and field. social mitigation plans
[ 173 ] SDGs
Impactful selectivity through the Project Qualification and Prioritisation tool
sDB has mainstreamed the Qualification and Prioritisation process, introducing a formal tool to improve Ithe Quality at Entry for IsDB . The tool is designed to enhance impactful selectivity for developing the pipeline of sovereign projects
PURPOSE The QnP Tool has METHOD X The average age of IsDB projects used provided IsDB with X The QnP is designed to assist IsDB’s to exceed that of its peers and hence the opportunity to management in making an informed warranted efforts to address root causes, decision on building and agreeing upon the including quality-at-entry of projects, to select projects that pipeline for the IWP. ensure quick implementation. In addition, are most impactful given IsDB’s new business model, which X The QnP is used alongside the IsDB places projects within integrated country and aligned with the standard Project Concept Note during the programmes, there was a need to introduce project programming stage. The QnP is new tools that ensure strategic alignment P5P applied in two stages. with the overall programme goals. X Qualification stage: Qualification is the X The Qualification and Prioritisation tool first filtering stage to select the appropriate (QnP) has helped IsDB to focus on projects projects. It covers two dimensions of that are at an advanced stage of readiness, the 6-R Framework, i.e. Relevance and ushering in a significant deviation from the Readiness. The process is led by the past, whereby projects were not subject to Regional Hub (RH) Country Manager rigorous checking and due diligence during and supported by the relevant IsDB the selection process, resulting in delayed departments. implementation. X The qualification of each project is validated by the Department of Strategy and Transformation (DoST). Projects validated by DoST are then subjected to prioritisation criteria. The mandatory criteria in the qualification checklist are to be supported through evidence to demonstrate the necessary compliance.
X Prioritisation stage: Prioritisation is the second filtering stage and is designed to objectively rate the qualified projects, based on criteria comprising the remaining dimensions of the 6-R Framework: Requirements, Risks, Sustainability of Financial and Economic Returns, and Results. This stage is also led by the RH Country Manager in coordination with the Operation Team Leader and supported by the relevant IsDB departments. The final prioritisation is validated by the Chief
[ 174 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
significant results in MCs. Together, allowing access to microfinance to these developmental outputs will another 300,000 people, including address specific SDGs, namely the creation of over 1,700 rural SDG 2 (Zero Hunger), SDG 3 enterprises. (Good Health), SDG 4 (Quality Education), SDG 6 (Clean Water and X Transport: IsDB will focus on Sanitation), SDG 7 (Clean Energy), building over 1,500 km of roads, SDG 8 (Economic Growth), and among them 502 km of expressway. SDG 9 (Infrastructure, Industry, and In addition, a total of 76 km of railway Innovation). tracks will be constructed.
X Agriculture: The proposed X For the 2021 Work Programme, projects are expected to irrigate over the ready projects are by and large 140,000 hectares of land, enabling a in line with the sectoral distribution storage capacity of over 50,000 tons. of the SDG gaps (within less than ± 10%).The exception is the Transport X Health: IsDB will contribute to sector, where the financing variance providing access to health services is 37% above the required allocation, for almost 110,000 people, by although this is in line with MC constructing and equipping nearly 80 strategies. Efforts are being made health facilities and adding 916 new to identify a more enriched pipeline, beds to hospitals. These projects with sectoral distribution in line Product and Partnership Officer and are expected to provide training to with the SDG sectoral gaps for the the Chief Operations Officer (COO). more than 2,000 health personnel. extended ready pipeline of projects They will reach a population of for the 2021–23 Work Programme. nearly one million with various health ACHIEVEMENTS awareness campaigns. INVESTMENT X The QnP has provided IsDB with an opportunity to select projects X Education: IsDB’s projects X The operation plans for these which are most impactful and are expected to benefit more projects amount to US$ 1.2 billion. aligned with the P5P. than 255,000 students at various This investment will reap benefits, educational levels through the as the QnP provides the basis for X At the first stage of the project construction of over 115 educational impactful selectivity, providing IsDB cycle, it is critical to set out the institutes. An estimated 6,000 with the opportunity to contribute key criteria of identification of the teachers will be trained. towards selecting, monitoring and priority development initiatives in achieving significant results for MCs. keeping with the quality dimensions X Water and sanitation: IsDB’s integrated in the QnP Tool. projects will contribute to allowing access to potable water for nearly X To improve the quality of projects, 1,500 households and connecting the key considerations at the project nearly 200,000 households to PIPELINE PROJECTS programming stage include: improved sanitation facilities. – Strategic alignment/ sector focus IsDB will connect over – Risks X Energy: IsDB will connect over – Portfolio performance in terms of one million new households to the 1 million new country and region electricity grid by building nearly – Operational plan 6,000 km of transmission lines. The households to the electricity – Project quality at entry power plant projects are expected – Alignment with the KPIs set for to generate 1.6 gigawatts of energy grid by building nearly the IWP 2021–23. from renewable sources. 6,000 km of X As a result of applying the QnP X Finance: IsDB impacts the Tool to the 2021 Work Programme, economic growth of the population transmission lines the proposed operational plan for through job creation and training the year is expected to generate of nearly 45,000 people and
[ 175 ] SDGs
Project Portfolio Dashboard
he Project Portfolio Dashboard is a crucial tool that supports the T management of IsDB’s funding portfolio
X The intention is that the Dashboard will PURPOSE The Project act as a source of information that will lead X One of the fundamental objectives of Portfolio Dashboard to improved performance of the portfolio IsDB’s operations department resides in the has significantly with faster approvals, as well as improved ability to effectively and efficiently manage effectiveness and disbursement of projects. the active portfolio of approximately improved US$ 26.8 billion through the RHs. operational METHOD X IsDB’s approach to management efficiencies and X IsDB has developed a holistic and information reporting seeks to: comprehensive methodology to achieve its – Provide data-driven management simplified access to portfolio management objectives through a information for executive decision- project information multi-pronged approach involving: making – Active project supervision through – Capture organisation-wide for the BED Project Implementation Assessment performance, results and effectiveness, and Support Reports encompassing a holistic approach, – Country portfolio performance reviews both from qualitative and quantitative (CPPRs) perspectives. – Cross-departmental task force to focus on portfolio improvement X IsDB has developed a Project Portfolio – Measuring and managing results in the Dashboard with two major objectives: form of quality at exit of projects – To address the high-level issues and – Development of electronic dashboards indicators related to the portfolio for continuous monitoring of the quality performance of the portfolio and effective portfolio – To provide information to the BED in management. cases where its attention is sought. X The Dashboard has many interesting features that help IsDB achieve the above aims, including: – Active Portfolio – Active Portfolio breakdown by pre- effective, disbursed and cumulative undisbursed commitments (CUC) – CUC breakdown by countries – Current year approval, disbursed and completed projects – Opportunity to examine the portfolio according to aspects such as ‘Delayed’, ‘Warning’ and ‘On track’ – Portfolio breakdown by region – Portfolio by sector.
X Data is gathered from the core Operations Management System (OMS), which provides a single source of truth to all the stakeholders.
[ 176 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
X The data in the OMS is updated facilitate proactive and evidence- INVESTMENT on a live basis by RHs operations based interventions from the COO in team leaders and other sources. 2021. X The Dashboard was developed internally by IsDB staff and no X Different parameters are used X The Project Portfolio Dashboard additional resources were spent on in clustering the data and carrying provides a source of live information its development. out analysis, according to business to the BED members and allows definitions and requirements. gathering key information about the projects in their respective PROJECT PORTFOLIO constituencies by sector, country and DASHBOARD ACHIEVEMENTS region. In turn, this would lead to the X To appropriately monitor and improvement of the project lifecycle The Dashboard facilitates report on improvement in operational as proactive measures can be taken delivery from RHs, key operations to address the challenges associated effective and efficient portfolio indicators for 2021 have with the project implementation. already been digitised for the Project management, through Portfolio Monitoring Dashboard. X The ageing of the project lifecycle These are related to the following has improved recently, driven by: IsDB’s RHs, of an active areas of activity: – Concerted efforts towards – Signing decentralisation portfolio of approximately – Effectiveness – An effective way of monitoring – Disbursement of projects. and managing the project portfolio through live dashboards US$ 26.8 billion X IsDB has developed the and quarterly Management Dashboard to allow for regular Information Reports, which has operations management reporting improved transparency and on key portfolio indicators and will visibility.
[ 177 ]
SDGs
Revamped annual development effectiveness reporting
he Annual Development Effectiveness Report provides an overview of the development challenges Tof MCs and the contributions made annually by IsDB towards achieving development results in these countries and in Muslim communities in non-MCs
PURPOSE The report is a METHOD X The purpose of the Annual Development flagship document X Target-setting drives IsDB’s priorities and Effectiveness Report (ADER) is to present used to attract activities in the direction specified in IsDB’s the achievements and results of IsDB to the 10YS and the P5P. This is achieved through wider stakeholders along with co-financiers international donors a strategy map that translates the 10YS and partners. and investors and P5P priorities into Key Performance Indicators (KPIs) across three levels — X The ADER has been revamped to focus Goals, Results, and Corporate Performance. on the results and their alignment with the SDGs and the P5P. X The report provides an in-depth review of all achievements across the impact (goals), results (operational) and performance (corporate) levels. The review is both comprehensive and visually appealing, with infographics, much quantifiable information and a data-driven approach to provide readers with clear information.
X A results framework that stems from the strategy scorecard is cascaded down in the form of 3 development goals, 6 operational results and 6 performance drivers. The performance drivers are further divided in order of complexity to corporate, department and division levels.
ACHIEVEMENTS X As IsDB continues to develop its operating model, the ADER helps monitor the effectiveness of interventions so that IsDB can adjust delivery mechanisms to render the best value for money.
X During the last decade towards the SDG targets for 2030, MCs, MDBs and other organisations need to prioritise their interventions, and ensure that every possible mechanism is in place to meet the SDG targets.
X The ADER is a tool used both to celebrate the results achieved and to
[ 178 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
take corrective action for missed MCs. As a multilateral development and expediting procurement and targets. The report, appreciated by all bank, IsDB has the mandate to disbursement, with the crucial stakeholders, is one of the primary finance as well as to develop viable objective of monitoring and reporting tools deployed to attract donors projects that address the priority on the developmental results and and investors by showcasing IsDB’s needs of MCs. outcomes achieved on the ground. achievements. X The report aims to create a X It provides an update of culture of development effectiveness THE REPORT PROVIDES AN socioeconomic development and results-based management. ANNUAL IN-DEPTH REVIEW OF prospects in IsDB’s 57 MCs ALL ACHIEVEMENTS (and IsDB’s performance and INVESTMENT contributions to development results The results framework is in MCs and Muslim communities in X The report is a flagship document non-MCs). used to attract international shown in the form of donors and investors, showcasing X The report synthesises data IsDB’s value addition in terms of 3 development goals from IsDB’s corporate systems, interventions in MCs. assessments, evaluations and 6 operational results external sources. X It balances the development effectiveness and results-based 6 performance drivers X It is a significant point of management operations focused information for IsDB’s management, on attracting new projects, stakeholders and beneficiaries in mobilising funds, making approvals,
[ 179 ] SDGs
Timely monitoring of Senegal's SDGs data
sDB and the Global Partnership for Sustainable Development Data established a partnership in 2019 I to improve the production and use of timely data to support monitoring SDGs progress
PURPOSE IsDB and the Global METHOD X This initiative focuses on an area that Partnership have X Working with partners from the is traditionally ignored by development joined forces with government, civil society, academia and practitioners though fundamental for the private sector, IsDB and the Global successful policymaking. Through a the Government Partnership identified SDG indicators partnership with the Global Partnership of Senegal to that are a priority for timely monitoring in for Sustainable Development Data Senegal. (Global Partnership), IsDB has increased test the use of awareness of its expertise, not just as X It is critical that the use of new data a financier, but as a solutions provider, satellite imagery sources, such as earth observation, is knowledge broker, facilitator, capacity to provide timely embedded within institutional frameworks builder and an institution in tune with to ensure leadership and sustained the needs of its MCs. Using the latest data that can inform commitment. In Senegal, IsDB and the technologies and harnessing the power environmental Global Partnership partnered with the of STI, this project seeks to help Senegal Directorate of Planning and Environmental monitor its progress on the SDGs. protection policies Monitoring of the Ministry of Environment and support and Sustainable Development, together X The project facilitates better monitoring with the think tank, Prospective Agricole et and measurement of the impact of various agricultural Rural (IPAR). A national coordination and policy and financial interventions made productivity collaboration mechanism was developed in Senegal. In addition, it has significant to guide work on data for environmental potential for scaling up and tapping into management linked to the national IsDB’s SSTrC efforts, resulting in significant stakeholders’ platform for monitoring the positive results from this collaboration SDGs. between IsDB, the Global Partnership and the Government of Senegal X Once the priority SDG indicators were identified, IsDB and the Global Partnership worked with partners in Senegal to establish a multi-stakeholder expert task team to advise on the use and testing of methods, and commissioned research with local partners to explore the production of data. One of the key tools identified was the Africa Regional Data Cube (ARDC). The ARDC is a tool developed by the Global Partnership and its partners to harness the latest earth observation data and satellite technology to help countries in Africa address various issues relating to agriculture, food security, deforestation, urbanisation, water access, etc.
X After agreeing on the focus areas and methods, the team worked within the Senegalese Government structures to
[ 180 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
X Goal 15: Life on Land — Satellite imagery was deployed to understand deforestation, focusing on areas affected by illegal logging, bush fires, and the clearing of land for agriculture. It identified locations where deforestation was particularly high over a much larger geography and far quicker than it would have taken through manual mapping, field surveys, and administrative records. This improves the understanding of the scope and drivers of deforestation and is supporting a more efficient targeting of resources to tackle it.
INVESTMENT develop capacity-building activities observation and geospatial data to X The total budget for this and provide ongoing support. Capacity inform policy making and progress programme was US$ 72,855, building involved a series of in-person on the SDGs in three key areas: of which the Global Partnership training sessions between April and – Agriculture contributed 45% and IsDB 55%. The September 2019, bringing in regional – Deforestation project took longer than originally and international partners from NASA. – Water management. anticipated, due to the COVID-19 pandemic and consequently, Global X The focus on institutional X Goal 2: Zero Hunger — Satellite Partnership’s contribution may have engagement and collaboration data was analysed to identify the been higher. ensured that all relevant characteristics of areas being used stakeholders agreed on the tools for agricultural activity across all and methodologies used, enabling 45 departments of Senegal. This harmonisation and a collective decreased data collection time from agreement on results. This approach five months to two, which allowed also supports data sharing among farmers to start selling crops earlier, government agencies and facilitates thus reducing postharvest losses. It SATELLITE DATA the coordination of actions. also helped the Government improve the distribution of drought-resistant Satellite data is analysed to X This combination of innovative crops to where they are most technology, capacity building and needed. identify the characteristics of political engagement enabled IsDB to collectively produce new and X Goal 6: Clean Water and agricultural areas across all timely insights on deforestation, Sanitation — Satellite data was used water management and agricultural to provide insights into the extent departments of Senegal productivity. These insights have and quality of Lake Guiers, which 45 since been used by the Government provides about 40% of the water of Senegal to enable it to make more consumed in Senegal’s capital. efficient decisions and effective Processed data from the ARDC INFORMING POLICY MAKING policies that support progress allowed a rapid calculation of the rate AND PROGRESS ON THE SDGS towards the SDGs. of decline of water quantity over the last four years, helping to reduce the time needed to assess water quality Agriculture, Deforestation, ACHIEVEMENTS from more than two days to half a X This initiative built the institutional day, and enabling a rapid response Water Management capacity of the Senegalese to protect Dakar’s drinking water Government to access and use earth supplies.
[ 181 ] Enhancing governance
[ 182 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
[ 183 ] SDGs
Integrated Control Framework
he Integrated Control Framework (ICF) defines the mandates, rights, responsibilities, roles, functions and T structure of the principal IsDB authorities based on a framework of single-point accountability
X The ICF aims to serve the following PURPOSE The ICF has purposes: X The new business model shifts IsDB improved controls, – To adapt IsDB's new governance model towards a decentralised decision making transparency in to the strategic vision of the 10YS and framework whereby leaders at the second the P5P and third levels are empowered to make operations, and – To improve IsDB's strategic decisions while being accountable. This efficiency and effectiveness by balancing efficiency new model improves efficiency significantly gains with additional lines of defence and requires a strong ex-post oversight. effectiveness in – To facilitate IsDB's transformation service delivery from a centralised to a decentralised X Decentralised organisations need to organisation. build multiple lines of defence (i.e., from the field, to the middle/senior management, to METHOD dedicated independent oversight units, to board-level steering and external evaluation). X Through single-point accountability, which is a global best practice in corporate X In the absence of a comprehensive governance, the ICF emphasises the clarity policy framework that defines how IsDB of responsibilities and the alignment of should strike such a balance while taking authorities with accountability. into consideration the steep transition away from centralisation, the organisation X The ICF ensures the effectiveness of decided to introduce the ICF. IsDB's governance practices by: – Defining the mandates, rights, responsibilities, roles, functions, and structure of the principal authorities of the BED and the Management with the operationalisation of the new business model through the adoption of a decentralised approach and the operationalisation of Regional Hubs (RHs) and Centres of Excellence – Updating governance documents, including the organisational manual, the organisation structure, BED committee charters, Management committee charters, the Delegation of Authorities (DoA) Matrix, and other key governance instruments – Facilitating and catalysing the development, maintenance, updating, monitoring and publication of policies.
ACHIEVEMENTS X The achievements made under the ICF to date include:
[ 184 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
– Reconstituting BED committees the organisation structure in the Operations in October 2019. In — The BED has established Governance and Policy Portal. collaboration with SignatureNet, from among its members four The CGS also periodically reviews IsDB launched its online new committees: Finance and the Organisation Manual platform for the management Risk Management Committee, – Updating the Delegation of of authorised signatures in Operations and Development Authorities Matrix — The initial November 2020 Effectiveness Committee, DoA was issued in January 2018. – Establishing the Administrative Governance and Administrative As a live document, it requires Tribunal — A key milestone Committee, and Audit Committee. constant updating to reflect the in the history of IsDB is the They all have a streamlined ongoing changes in IsDB. For this approval by all IsDB Group composition and a clear mandate reason, it has subsequently been boards in September 2020 of the to conduct in-depth assessment comprehensively reviewed on establishment of the IsDB Group of their key focus areas several occasions to reflect the Administrative Tribunal, expected – Reconstituting management necessary authorities and to align to start work in the second half of committees — IsDB established it with the new organisational 2021 several management structure and manual. For – Adopting a Code of Conduct committees, namely: Executive instance, over 500 authorities for BED members — The BED Management Committee, Asset have been delegated from the approved in April 2021 a new Liability Management Committee, President to lower management code of conduct which sets forth Investment Management layers principles and ethical standards Committee Risk Management – Updating policies and applicable to its members. Committee, Operations developing Policy Management Management Committee, APIF System automation — The INVESTMENT Management Committee, President approved the Policy IT Steering Committee and Management Framework (PMF) X The development and Economic Empowerment in 2017 to develop and update implementation of the ICF involves Operations Management the policies required to enable several IsDB units. For instance, Committee the 10YS and the P5P. The PMF IsDB established the CGS, a new – Operationalising RHs — RHs are is currently reviewed to adapt it unit within the Office of the Director fully responsible and accountable to the changing organisational General, General Counsel to oversee for business development, structure and emerging needs. the rollout of the ICF over the delivery, revenue generation, A new Corporate Governance past 3 years. Several platforms resource mobilisation and and Policy Portal has been have been developed to improve branding in MCs and Muslim established to allow IsDB staff controls, transparency in operations, communities in non-MCs. In and BED members to access efficiency and effectiveness in the February 2018, field offices were governance documents and delivery of services. transformed into RHs in eight approved policies MCs (Indonesia, Kazakhstan, – Introducing a Corporate Morocco, Nigeria, Senegal, Governance e-Learning Course Turkey, Egypt and Bangladesh) — A mandatory corporate and new RHs were established governance e-learning course in Suriname, Uganda and the has been launched. This course, CHANGING ORGANISATIONAL United Arab Emirates, while Saudi which must be attended by all STRUCTURE Arabia, Palestine and Yemen are staff members once a year, will managed from the headquarters. help staff members understand The RHs in the United Arab IsDB's mandate, basic governance The ICF works with the Emirates and Malaysia were documents, membership, capital then transformed into Centres of structure, organisation structure BED, Management and Excellence. Currently, IsDB has 10 and governance structure RHs and 2 Centres of Excellence – Managing authorised signatures staff to facilitate the – Updating the Organisational — The President approved the operationalisation of the new Manual and the Organisation Authorised Signatory Book for Structure — The Corporate Banking and Treasury operations, business model Governance Section (CGS) Investment Operations and publishes monthly updates to Islamic Financial Services
[ 185 ] SDGs
Decentralisation: RHs bring IsDB Group closer to the field
y taking a more decentralised approach to its work, IsDB is helping its MCs to build Btheir industrial capacity in a variety of ways that are appropriate to them
X By empowering RHs, the intention is PURPOSE Through to enable the independent execution of X IsDB has long focused on meeting MCs decentralisation, projects targeted specifically at meeting expectations to help drive improvement IsDB is committed the needs identified in particular regions. on commonly tracked project execution metrics, including: to moving away X Empowerment will bring such – Quality at entry (from the date of from top-down benefits as greater proactivity in project project approval to the date of first identification and preparation as RHs go disbursement) actions in favour of through their project selection processes. – Quality of implementation (avoiding delays during the disbursement phase). interventions that X Decentralisation initiatives are expected address the root to improve the visibility of IsDB and X The identified issues carried significant significantly enhance the implementation implicit financial costs (opportunity causes impeding of operations. costs) for IsDB. It was decided that a sustainable growth decentralised approach would be the most METHOD effective way to address these issues. in MCs X As part of the P5P, IsDB is implementing a X One aim of decentralising is to reduce decentralised operating model by enhancing the length of the project lifecycle, which local presence in MCs with the establishment was on average 21 months. Expediting of 10 RHs and two Centres of Excellence. the project lifecycle to international standards is expected to accrue an annual X The decentralisation of portfolio financial benefit of US$ 57 million. In management from the Headquarters addition, it enables IsDB to finance more to RHs is changing the way IsDB does developmental projects resulting from the business, along with other structural faster asset turnover. changes, including: – Reduction in delays at various stages of the project cycle – Review and closure of inactive and nonperforming projects – Reduction in the amount of CUC.
X In encouraging a decentralised approach, IsDB is not forfeiting any of its traditional strengths or turning its back on established relationships with the governments of its MCs at Headquarters level. It will increasingly work with governments to jointly identify priority needs and opportunities in individual MCs and to leverage the resources required to produce much-needed changes.
[ 186 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
track progress on decentralisation initiatives, operational targets and service-level agreements.
X Development and rollout of critical guidelines architecture related to decentralisation was completed in 2019, resulting in approval of six critical policies governing RHs management.
INVESTMENT X The financial benefits far exceed the projected incremental costs from X Although the operating costs departments, executing agencies decentralisation, which comprise of adopting a decentralised model and project management units of one-time set-up costs of US$ 8.6 are significant, it is expected that IsDB-financed projects. million and annual incremental the potential financial benefits from operating costs of US$ 13.8 million. improvement in project execution X To facilitate operational delivery resulting from decentralisation will in line with the GVC-based MCPS X Office facilities and IT exceed the incremental operating approach, IsDB will further scale infrastructure upgrade projects have costs associated with it. up decentralisation initiatives in been completed in all RHs within the Regional Hubs during the period budget allocated, with savings of X IsDB will undertake coordinated 2021–23. US$ 708,000. interventions that catalyse investments by private companies, ACHIEVEMENTS philanthropic organisations, individuals, governments, non- X To date, significant achievements governmental organisations and civil in decentralisation have been society organisations. made, resulting in the successful delivery of 8 operational RHs that X The new focus on RHs have improved the visibility of IsDB, empowerment reflects a shift in spearheaded the delivery of the the planning processes of IsDB, as COVID-19 SPRP operations and seen in IsDB’s new IWP. The IWP improved the implementation of the EXPEDITING THE PROJECT has been introduced to replace regular operations portfolio in MCs. LIFECYCLE TO INTERNATIONAL annual programming exercises, thus In this regard, 70% of all operations STANDARDS allowing more time and resources for staff have already been posted in developing projects. the field in RHs and the average Financial benefit of portfolio age is expected to decrease X IsDB is also carrying out dynamic significantly to 5.4 years by 2023 due programming exercises with the to increased field presence. US$ 57 million aim of enhancing the quality of the project pipeline. X A digital portal launched in 2019 for all operational business ENHANCED DIGITISATION AND X To bring services closer to MCs, processes has significantly improved SIMPLER BUSINESS PROCESSES IsDB has deployed procurement staff awareness of the new business specialists in RHs. model and will drive the optimisation reduction in RHs’ and reengineering of operational 15% X Given low procurement capacities business processes in the COO operating expenses in some MCs, affecting project Directorate. implementation and delivery, IsDB has also organised capacity-building X Three major corporate training for MC staff in ministries, dashboards have been introduced to
[ 187 ] SDGs
Fund Management Framework
sDB has established a new Fund Management Framework to enhance its capabilities and become a Itrusted partner in the trust fund and special fund space
X The initiative consists of mainstreaming PURPOSE The Fund the special funds and trust funds X In 2019, an internal review of IsDB’s Management administered by IsDB into its strategies and administered trust funds and special funds Framework will allow business processes and providing IsDB led IsDB to launch an exercise to reinforce with a transparent and comprehensive best practice, along with strong, transparent for easier access to framework in line with the best practice for governance and operating arrangements external funds by the establishment, administration and use and result-oriented management. building trust with of each special fund and trust fund. X In fact, it became clear that IsDB needed potential partners, X The purpose of the Fund Management to enhance its capabilities in external fund Framework is: management to demonstrate its credibility particularly in the – To strengthen focus of the P5P and develop a stronger competitive Awqaf sector where on IsDB’s strategic goal to deliver advantage in this space. the potential is huge significant growth in off-balance sheet resources, enabling it to mobilise X As a result, it was decided to set up and is estimated in much greater levels of concessional a new fund management framework in US$ trillions. It is a finance for its MCs, whilst minimising accordance with best practices and based financial risk to the IsDB Group. The on strong and transparent governance and major enabler for the P5P also emphasises the need for operating arrangements. achievement of the progressive change of the organisation from a development bank to a bank for X In establishing a best practice fund P5P, in particular on development and developers. These management framework, IsDB is scaling- its Funding, Linkages ambitions can only be achieved by up its efforts to mobilise off-balance sheet nurturing and expanding partnerships resources by bolstering its reputation as a and Reinforcement in the international development trusted development partner and effective pillars community, and pooling capabilities and manager of third-party funds. resources to achieve common goals through fit-for-purpose funding vehicles – To ensure that funds are included in the mainstream of IsDB’s business, and that the capacities and resources of the entire organisation are brought to bear in assuring the success and growth of IsDB’s funds business – To instil practices that meet international standards and promote the engagement of development partners and sustainable results.
X For IsDB to build and sustain a competitive advantage in this space, as a trusted partner in a network of successful developers working at the cutting-edge of the field, it must consistently deliver results for the contributors to its existing and future special funds and trust funds,
[ 188 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
at an acceptable level of risk and in to ensuring the long-term INVESTMENT line with the fundamentals of good sustainability and effectiveness of governance. the funds business X The approved Fund Management – Risk-based management of Framework document was funds (not seeking to avert all developed at a cost of ID 120,000, METHOD risks, but rather ensuring that the out of a budget of ID 900,000 for full X IsDB’s Fund Management risks taken are acknowledged, operationalisation of the framework. Framework was approved by the calculated and managed) This level of expenditure is dwarfed Executive Management Committee – A commitment to the Paris by current resource mobilisation in December 2019 and adopted by Declaration in the management initiatives benefiting from it, which the BED in February 2020. of funds, including country currently amount to more than US$ 1 ownership and mutual billion, including CWS, UNRWA, X The Framework includes both accountability. Muslim Philanthropic Fund with an operating and a governance UNICEF, and IWIF. framework with strong and X Consistent delivery of results in transparent governance line with strong business principles X As IsDB moves into arrangements that will ensure that and international best practice operationalising and embedding both existing and new funds are will allow IsDB to capitalise on its the full, comprehensive and placed on solid foundations and experience, reach out to like-minded robust external fund management will sustain the support of financial developers and enable the market to service, offering good governance contributors over the long term. work for development. and transparency to all providers of finance — whether public or X The Framework was developed X A clear and robust fund private, large or small — there is in-house, with some TA from management framework is now the possibility of unlocking huge independent experts from Adam a prerequisite of the due diligence potential, in particular in the Awqaf Smith International (a UK-based process before an external financier sector, measured in the realms of global advisory firm specialised is able to make any commitment to US$ trillions. in the development and delivery a fund. This initiative has delivered of programme and trust funds for such a framework, and now provides bilateral and multilateral deployment) a fundamental basis for discussion through a three-stage process: with potential partners in new funds. – A gap analysis of the existing THE FUND MANAGEMENT IsDB-administered funds X Benefiting from the approved FRAMEWORK – Design of a robust framework, in Fund Management Framework as line with international standards, a basis of negotiation built on trust, The Framework’s several that is tailored to IsDB’s needs a series of resource mobilisation – A clear implementation roadmap, initiatives targeting upwards of resource mobilisation including an IT solution, to US$ 1 billion are currently under deliver effective and transparent development with partners. initiatives target at least management of all funds. X In accordance with the Fund US$ 1 billion Management Framework, the most ACHIEVEMENTS significant IsDB-administered trust X The Fund Management funds and special funds now have a PROJECT BUDGET Framework helps IsDB adhere to robust Investment Policy Statement some key business principles: that helps ensure more effective – Transparent and inclusive investment management for superior The Framework was decision making, both within risk-adjusted returns. IsDB and in global and country developed with a budget X partnership bodies and forums Beyond these foundational of approximately in which IsDB and its partners achievements, completion of participate implementation across all funds is – Cost-effectiveness and value expected in 2021, with only some ID 120,000 for money for financiers and aspects related to the IT solution beneficiaries alike, with a view potentially extending into Q2, 2022.
[ 189 ] SDGs
Disbursement Handbook developed
anaging the flow of large sums for the funding of programmes and projects is a crucial focus Mfor IsDB . The Disbursement Handbook is designed to guide all concerned stakeholders with the objective of having one document that captures all the critical aspects related to disbursements
X Organisational improvements to boost PURPOSE The Handbook efficiency and effectiveness as part of X As IsDB embarked on the journey of is a compilation IsDB’s new business model have addressed decentralisation, the disbursement function of disbursement many aspects of the funding cycle, making was decentralised to the Regional Hubs funds go further and reducing costs. as well, with the objective of improving policies, procedures disbursements and expediting project and guidelines for all X As part of this comprehensive approach, implementation. This decentralised IsDB has prepared the Disbursement approach required sound policies and parties involved in Handbook. procedures and greater harmonisation with the relevant internal and external the financial aspects X With the objective of providing IsDB stakeholders. Hence, a Disbursement of IsDB-funded beneficiaries with clear and easy-to-use Handbook was developed to address these guidelines about disbursement policies and important aspects. projects procedures, the Handbook: – Focuses primarily on the critical steps X IsDB is continually growing the support that beneficiaries are required to follow available to its MCs. In 2019, it disbursed in submitting withdrawal applications US$ 2.98 billion for projects and grants, and in obtaining proceeds from 16% higher than the amount disbursed financing or grant accounts, for the in 2018, which was the highest level of execution of projects and programmes disbursements made by the Bank. To financed either by or through IsDB ensure consistent value in its disbursement – Covers the processes required by activities, IsDB is constantly working to yield IsDB for closing the relevant project or better value for its funding programmes. programme disbursement accounts, after project implementation – Is intended to be read in conjunction with the relevant financing or grant documentation.
X The Handbook is designed to reduce delays at various project stages. It has already played a part in enabling the achievement of IsDB’s 2019 disbursement targets and improvements in various portfolio quality indicators.
METHOD X The Handbook plays an important role in ensuring continued improvement on all relevant metrics. It provides a summary of the disbursement policies, guidelines and procedures followed by IsDB and is an important reference tool for: – Beneficiaries
[ 190 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
financing, guidelines for X An aspect of IsDB’s funding procurement of goods, works and cycle that has seen considerable related services, and guidelines improvement is the time from for procurement of consultants approval to first disbursement of – Services under IsDB’s Project funds. Between 2017 and 2019, Financing, Project Financial IsDB reduced this by five months Management or Integrity Policy, (from 24 months to 19 months), thus and IsDB’s Anti-Corruption enabling recipients to begin seeing Guidelines. the benefits of funding much sooner.
X Other matters covered by the X The greatest improvements were Handbook include: observed in water sector projects, – A broad overview of IsDB Group where the time lag between the structure and organisation, approval date and first disbursement with a particular focus on date was reduced from 30 to 17 IsDB’s operations to which the months, followed by the finance and – Executing agencies disbursement-related policies and agriculture sector projects. – Project implementation units procedures apply – Co-financiers – Aspects of IsDB’s policies that INVESTMENT – Suppliers relate to disbursement operations, – Other external contracting parties including those covering critical X The Handbook’s comprehensive involved in the preparation and financing-related project focus on IsDB’s disbursements has implementation of projects and events such as suspension or contributed to reducing the ratio of programmes financed by or cancellation internal administrative expenses through IsDB. – The broad procedural contours per US$ 1 million disbursement of the four standard modes of to US$ 50,000 in 2021 from X It also contains advice on how disbursement at IsDB. US$ 63,000 in 2018. to deal with co-financing from partners who have requested X The Handbook also features that IsDB assume responsibility information about the main for administration of project or organisations relevant to programme disbursements. disbursement operations of IsDB: 2019 DISBURSEMENTS – ICD X The policies and procedures – ICIEC In 2019, IsDB disbursed outlined in the Handbook apply to – ITFC sovereign and sovereign-guaranteed – IsDBI. operations funded by IsDB (or US$ 2.98 billion IsDB-administered funds). These ACHIEVEMENTS for projects and grants — operations utilise proceeds from sources including: X The Handbook has enabled IsDB 16% higher than in 2018 – OCR to achieve a significant reduction in – ISFD delays at various stages of project – Waqf Fund implementation. – Special and trust funds. The Handbook and the new X Significant time efficiency was Other donor-originated funds gained in disbursement request decentralised disbursement administered by IsDB processing, from an average of X The policies and procedures 19 days in 2017 to only 7 days in model have reduced the outlined in the Handbook apply to 2020. This is primarily due to the all Islamic mode financing extended decentralisation of disbursement- disbursement cycle period by IsDB to beneficiaries, including related functions under the P5P, as grants financed or managed by IsDB. well as other initiatives such as the from 19 to 7 days They cover matters such as: Disbursement Handbook, which has – IsDB’s general conditions improved the overall efficiency of the applicable to sovereign-backed process.
[ 191 ] SDGs
e-Disbursement Platform
sDB has developed an integrated digital solution with its e-Disbursement Platform (EDP), an online platform Ito allow MCs to submit project disbursement requests electronically with an instant messaging functionality for internal and external project team members to collaborate directly
X In 2020, due to the unforeseen PURPOSE The e-Disbursement disruption caused to mailing services, a X Enhancing and improving project Platform is an online temporary solution was developed, as an implementation will always be a top priority service that allows emergency measure, to validate withdrawal for IsDB. The Bank is systematically applications sent electronically. Given endeavouring to reduce its ecological MCs to submit the risks inherent to such a mode, there footprint by adopting environment-friendly disbursement was need for a more permanent solution best practices via digitisation. The EDP streamlining the submission process with aims to fulfil these goals whilst enhancing withdrawal in-built system controls. the user experience of all stakeholders. applications, monitor The platform is designed based on the X During the period from 2018 to 2020, latest technology, allowing flexible mobile real-time status of IsDB received an average of 5,045 access. It also serves as a remedy solution payment requests disbursement requests per year. This for control gaps that are inherent in any and collaborate entails an excessive number of hard manual process. documents as well as manual processing directly with project and storage space requirements. X IsDB is continually enhancing and teams to resolve improving its efficiency in processing X With the objective of constantly disbursement requests from MCs. disbursement- improving controls and time efficiency to Significant time efficiency was gained in related issues in a process disbursements, the EDP: processing these requests, from an average – Will be the single point of entry for of 19 days in 2017 to only 7 days in 2020. secure environment submission of disbursement requests, ensuring that all requests received are tracked and processed more efficiently – Is fully integrated with IsDB internal Operations Management System (OMS) such that once the request is validated in the EDP, it will automatically trigger in the OMS a disbursement request with all documents attached – Validates submissions before the project’s disbursement closing date is reached.
METHOD X The EDP plays an important role in the continuous improvement of all relevant KPI metrics. It will serve as a user-friendly interface to monitor and track real-time status of disbursement requests and collaborate directly with project teams to resolve disbursement-related issues in a secure chat environment.
[ 192 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
X The EDP is an integral tool is planned for the rollout to the – Reduce direct cost of courier for authorised signatories to remaining MCs before the 46th service to the MC and the project register official users who will Annual Meeting scheduled in – Minimise delays in receiving submit disbursement withdrawal September 2021. disbursement requests by up to applications on their behalf as well as 5–10 days, in some cases relevant finance and accounting staff – Reduce the cost related ACHIEVEMENTS from the Project Implementation to temporary storage and Units who will respond to X The EDP will achieve: permanent archiving of physical disbursement-related enquiries. – Greater control and governance, documents ensuring the tracking of every – Reduce processing time and X A plethora of training materials submission with the relevant manual tasks to scan and upload has been made available to support audit trail of human and system physical documents into the ERP users: a user guide, on-screen help processes from receipt to system. menus and recorded video demos. payment – Expedient collaboration X The EDP is accessible in IsDB’s with the instant messaging three languages: Arabic, English and feature to accelerate resolving French. disbursement-related issues DISBURSEMENT REQUEST – Transparency, thanks to live PROCESSING X Continuous improvements are in status updates on withdrawal progress and additional features for applications submitted by MCs. From an average of 19 days future releases are being designed. in 2017 to only days INVESTMENT 7 X The new e-Disbursement platform will be piloted in Indonesia X The EDP’s comprehensive focus in 2020 and Senegal end of June 2021. An on the end-to-end disbursement accelerated stabilisation period process will:
[ 193 ] SDGs
Reform package for the Waqf Fund
n 2017, IsDB's Management commanded a report that conducted a comprehensive assessment of the I status of IsDB Waqf Fund, leading to improvements in the Fund's sustainability
– Ensure financial sustainability through PURPOSE Several positive a robust financial projection model and X In its efforts to align with best practice outcomes have strengthening the budgeting process in endowment management, IsDB been achieved as – Drive change management through commissioned a study to ensure the long- workshops with required stakeholders. term financial sustainability of the Waqf a result of IsDB’s Fund. investment in a X The key programmes and initiatives of the Waqf Fund include: X The recommendations are to: formal study of its – Islamic Development Bank Institute – Optimise returns by enhancing the (IsDBI) proposed investment policy statement Waqf Fund, including – Adahi project for the utilisation of Hajj – Reinforce transparency with an the enhancement of sacrificial meat improved reporting mechanism – Special assistance to Muslim – Optimise spending through prudent the Fund’s long-term communities in non-MCs spending policy and guidelines sustainability – STI – Establish responsibility and single- – Scholarship Programme. point accountability by revamping the governance structure X An effectively managed Waqf Fund – Optimise resource allocation by would result in scaling up the above revisiting the business model programmes and enable IsDB to use the Fund as a new source of concessional finance for the benefit of MCs such as the following from IsDB’s 2020 work programme: – Smart Economy Initiatives: Aiming at knowledge-driven economic transformation – Capacity Building Programmes: An initiative for future knowledge leaders – Knowledge Creation Programmes: Developing the requisite enabling environment for Islamic finance – Knowledge Dissemination Programmes: Enhancing IsDBI’s visibility as a knowledge leader in Islamic finance.
METHOD X A comprehensive report, the ‘Technical Study and Recommendations on the Way Forward’, was carried out over several months, comprising analysis and discussions with various stakeholders regarding all aspects detrimental to the Waqf Fund’s financial sustainability. An external consultant was hired for this
[ 194 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
purpose, with the objective of – A change of functional currency X Although the Waqf Fund’s providing an independent review of from ID to US$ to minimise spending needs to be curtailed the challenges. currency risk, enhance further, the study has made the Fund profitability of the Fund and relatively more sustainable. comply with new Investment ACHIEVEMENTS Policy objectives X A number of outcomes have – Establishment of a Board of been achieved as a result of the Trustees Charter, with clear WAQF FUND REFORM investment in the formal Waqf Fund guidelines and objectives to be Study, including the creation of: achieved and with a focus on the The current spending of the – Investment policy statement and strategic, operational, financial asset transition plan and performance management of Waqf Fund fell by 59% – Spending policy and guidelines the Fund – Waqf Fund governance – Development of the Waqf after implementing the – Assessment framework for Fund Investment Management activities supported by the Fund Committee to maintain oversight study’s recommendations – Disclosure guidelines and and review all investments in the templates. Fund assets – Development of a protocol to The reform has reduced define the allocation of the Fund’s INVESTMENT attributable net income among its X The findings of the report resulted three distinct accounts the Fund's spending by in the implementation of a series – Development of a spending of recommendations, which has policy to formalise the spending US$ 23 million helped to improve the financial and decisions of the Fund and to compared to the past governance-related aspects of the define spending rate, rules and Waqf Fund. regulations. The policy includes few years detailed spending guidelines for X The study cost less than US$ 1 the grants and administrative costs million and resulted in a series of associated with the programmes recommendations, including: supported by the Fund.
[ 195 ] SDGs
Environmental, social and governance risk ratings
n recent years, ESG-related risks have emerged as key focus areas of risk management . IsDB is Icommitted to playing a leading role in helping its MCs to manage and mitigate these risks
X MDBs are aligned with ESG initiatives as PURPOSE Recommendations these are directly linked with the SDGs and X To tackle the enormous challenges by the Task Force best practices. presented by climate change hazards, on Climate-Related leading financial institutions (FIs) have X IsDB has initiated the necessary steps committed to various global standards, Financial Disclosures to implement climate-related best practices including: have received in its business operations for sustainable – The United Nations’ six Principles of development of its MCs. Responsible Investment (PRI) support from over – UNEFP-led initiative on Principles of X IsDB aims to ensure that all Responsible Banking 1,500 organisations components of identifying, measuring, – The Paris Agreement (with 189 globally, with market mitigating and monitoring ESG risk-related signatories as of February 2020) factors are adequately captured, managed – The Task Force on Climate- capitalisation of and reported in IsDB’s internal credit rating related Financial Disclosures US$ 12.6 trillion, models. This will: recommendations. – Ensure that IsDB’s portfolio remains and FIs responsible climate-friendly while maintaining X The industry has adopted various for assets worth quality in line with the highest ratings approaches to identification, quantification, requirements mitigation and control of ESG-related US$ 150 trillion – Facilitate better access to market risks. Markets have developed various funding and boost the achievement of mechanisms to manage their exposure and relevant SDGs for the benefit of MCs. move towards ESG-compliant financing and investments. METHOD X Within IsDB, governance is formalised by policies on environment protection and climate change, as well as by social safeguards for IsDB-financed and -invested projects, together with the adoption of ESG- related disclosure requirements.
X Strategy is formulated by considering the risks and opportunities related to ESG issues and their impact on business decisions and financial planning.
X Risk management is strengthened by applying quantitative modelling for identifying, measuring, mitigating and managing ESG-related risks at transaction and portfolio levels.
X Targets and benchmarks are set and analysed for IsDB’s management to track performance and take informed
[ 196 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
X It successfully launched its first Green Sukuk, which quickly became oversubscribed.
X An enterprise risk management programme was launched that includes tools for conducting scenario analysis and stress testing to capture the impact of ESG-related risks.
X Peer analysis was conducted with other MDBs about their approach to ESG risks.
INVESTMENT X IsDB is expected to receive significant financial and non-financial benefits from its ESG initiative. Primarily, the intention is to maintain IsDB’s access to larger financial markets in terms of resource mobilisation, by adopting ESG- related market best practices. decisions. The overall approach X The transactional-level risk X ESG-related models will provide and methodology applied at IsDB assessment is followed with a proactive scenario and a stress revolves around four areas: portfolio-level scenario setting testing-related approach to mitigate – Governance and stress testing to come up with the related financial risks. – Strategy the resulting impacts on financial – Risk management performance of IsDB by considering X MCs will benefit from IsDB support – Metrics and targets. ESG risks. to highlight and suggest mitigations for ESG-related risks of projects. X From the risk management ACHIEVEMENTS perspective, the ESG-related risks X Under the P5P, resources have are integrated into credit risk X Under the P5P, IsDB’s policies been allocated for risk management assessment at transactional and and guidelines relating to ESG areas staff to undergo the necessary portfolio levels. have been developed and approved training for full implementation of an in coordination with the Risk ESG-related framework at IsDB. X The project-level approach to Management function. ESG-related risks comprises: – Identifying project-level ESG risks X IsDB has appointed a renowned ESG METHODOLOGY — such as physical risks (acute consultant to internally develop a KEY FOCUS AREAS and chronic) and transition risks project-level assessment of climate- such as legal, technology, market, related risks. Governance reputation, etc. X – Measuring project-level impact on IsDB has undertaken a review Strategy revenues, costs and profitability of its risk rating methodologies after adjusting for the ability to that will include an overlay for adopt and mitigate. ESG-related risk, to arrive at a risk- Risk management adjusted rating of the financing X An ESG-adjusted risk rating of operations portfolios covering Metrics and targets the project is arrived at to make an projects, corporates, FIs and informed decision. countries.
[ 197 ] SDGs
COSO Framework
he Committee of Sponsoring Organizations of the Treadway Commission (COSO) is a comprehensive, Tintegrated framework that aims to improve the quality of financial reporting by focusing on corporate governance, ethical practices and internal control
X Fully implemented by IsDB by the end of PURPOSE Once the framework 2020, COSO has achieved the following: X As part of the P5P, IsDB prepared for is implemented, – Created a system of effective internal COSO readiness throughout 2020. The IsDB will be on par controls that are a critical component of initiative’s main objective was to perform IsDB management, and a foundation for a detailed assessment of the existing with the leading its safe operations internal control environment impacting global organisations – Enhanced the control environment IsDB’s financial reporting and operational to effectively mitigate many financial risks with a view to implementing the and MDBs reporting and operational risks, COSO framework for internal controls over contributing to greater efficiency and financial reporting processes. effectiveness of IsDB’s overall financial reporting and risk management activities – Identified and mitigated potential control gaps in the internal control system over financial reporting – Formalised and institutionalised internal control change initiatives – Contributed towards sustaining the AAA rating.
X The foundation of every good COSO Internal Controls over Financial Reporting (ICFR) programme is a well-defined strategy that aligns with organisational priorities. It requires understanding how that chosen level of reliance supports broader goals. More mature ICFR strategies aim beyond basic compliance, supporting IsDB’s corporate values and the P5P work programme and strategy.
METHOD X IsDB took an effective risk-based approach which was a cumulative and iterative process, rather than following a more linear path.
X The project began with a planning and scoping phase, with identifying and understanding significant accounts, disclosures and assertions that present a reasonable possibility of material misstatement to the financial statements.
[ 198 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
X A staff training programme on ACHIEVEMENTS ICFR was developed to ensure the X Entity-level controls were effective operation of the controls. documented based on the COSO principles. INVESTMENT X Proposed processes and controls X Investments were made in terms of: for financial reporting and fraud risk – Formalised and institutionalised were tested and implemented. system of effective internal controls X Anti-fraud controls were – Improved internal controls which developed and documented, and a will allow IsDB to better mitigate X A Risk Control Matrices permanent anti-fraud programme financial reporting risks and (RCM) approach was applied to was established. access the data necessary to build awareness and individual support sound financial decision accountability, focusing on business X A formal inventory of all making unit objectives, risks and mitigating processes affecting IsDB’s financial – Positive attention from sukuk controls. results was carried out (i.e. from investors, making IsDB more entity level controls to control attractive for these investors X The COSO team obtained activities). and better prepared for sukuk template approvals from the issuances and international rating stakeholders and used these for X Process flows and key control reviews developing RCMs across various tables were developed for all – Documented risk control library, processes established in IsDB. business processes affecting Key Risk Indicators (KRI), ICFR financial results. methodology and detailed gap X A Test of Design was performed report to ensure that controls are designed X Recommendations were provided – Further enhancements to IsDB’s appropriately and will prevent or to optimise processes and controls integrity and ethical values detect risks of material misstatement and a gap analysis of financial – The appropriate levels of in financial reporting or fraud. controls was performed. management to be held accountable for their internal X A Test of Operating Effectiveness X Existing process flows and control responsibilities in the was conducted to ensure that the control tables were reviewed and pursuit of P5P objectives. controls were operating effectively updated to reflect process/system during the financial year 2020. changes and improve the design of key processes and controls. SCOPE OF IMPLEMENTATION X Gaps / improvement opportunities were identified in X An inventory of all IsDB 8 Functions the existing control environment, applications in use affecting providing management with financial results (including end-user recommendations to remediate the computing applications) was carried 150 sub-processes gaps along with providing alternative out, and key controls over those / compensating controls. applications were documented. 800+ risks documented X All deficiencies / deviations X Improvements and were highlighted and analysed in a enhancements in IT application 200+ gaps identified as separate tracker to evaluate whether: controls were proposed. part of Phase I – The nature of deviation is limited to a certain type of transaction X A methodology, work – A lack of control owner programme, operational procedures 150+ gaps remediated / competence has led to the and templates for self-assessment compensating controls deviation were developed, together with – Changes to the volume of activity an ongoing audit of the controls IT remediations and transactions have led to the in terms of their design and 100+ deviation. effectiveness.
[ 199 ] SDGs
Enterprise Risk Management Programme
sDB has created a comprehensive roadmap to strengthen its risk management capabilities by implementing Iintegrated, advanced risk and financial management tools and solutions to enhance analytics and preserve financial sustainability and long-term resilience for the benefit of its MCs
X Both pillars require a robust enterprise- PURPOSE The project involves wide stress-testing framework to manage X Becoming a developer-focused multiple business emerging or unforeseen risks and institution is at the core of IsDB’s new stakeholders, vendor vulnerabilities, in addition to a financial and business model and P5P. Successful risk-reporting dashboard that can inform implementation of this requires an agile risk product solutions, proactive decision making. management framework and architecture and integration supported by enhanced analytics. IsDB METHOD has therefore commenced the ongoing with IsDB’s implementation of an Enterprise Risk X The ERM programme comprises: Management (ERM) solution as one of the existing systems – An integrated risk and finance DataMart key initiatives of the P5P. and platform, – Financial projection model – Advanced asset liability and proactive X The ERM programme requirements relying critically on profitability management are based on IsDB’s risk management accurate data and – Risk and financial analytics architecture, which has two pillars: – Risk reporting – Capital adequacy management integrated reporting – Economic capital calculation – Liquidity and balance sheet – Enterprise-wide stress testing solution management. – Dynamic finance and risk management dashboard.
X Successful implementation of the ERM solution is expected to strengthen IsDB’s data governance and enhance financial and risk management capabilities, resulting in long-term financial sustainability.
X The selection of the ERM solution vendor was conducted via a comprehensive request-for-proposal preparation, vendor due diligence, evaluation and selection with the support of a specialised external consultant.
X The broad nature of the project, involving multiple business stakeholders, vendor product solutions and integration with IsDB’s existing systems and platform, is an extremely complex undertaking, critically reliant on accurate data and integrated reporting. As such, it demands the alignment of stakeholders, vendors and IT, as well as tight control of interrelated processes such as project management, business processes, data governance,
[ 200 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
change management, quality control X Milestones achieved so far initiative, the BED and management and commercial considerations. include the following: have made available the required – Finalisation of technical scope budget and resources. Once the X To ensure smooth and signing of contracts with the solution is implemented, the potential implementation of the selected vendor return is expected to far outweigh the ERM programme, IsDB has – Establishment of the ERM project underlying costs. operationalised a detailed project governance, comprising steering governance structure with several committee, project director, delivery streams and defined roles project management office and ISDB RISK MANAGEMENT and responsibilities for each of project teams ROADMAP the participants across various – Automation of IsDB’s internal stakeholders under the supervision rating models Balance sheet management of a high-level steering committee. – Development of customised Loss Given Default models, the Liquidity risk methodology of which was also ACHIEVEMENTS presented to the Global Emerging X The ERM programme is at an Market Risk Data Consortium, an Capital adequacy management early stage of implementation. initiative of the of the leading MDBs Upon completion, it will deliver an – Implementation of IFRS9/FAS30. Financial projections integrated risk and finance DataMart along with advanced Asset Liability INVESTMENT Enterprise-wide stress testing Management, capital management and a financial projection system X In order to ensure that adequate and analytics. investment is made for this crucial
[ 201 ] SDGs
New Investment Management Framework
key component of the President’s Five-Year Programme is forging IsDB investment arm into an alpha- A generating fiduciary asset management function to manage the capital resources of IsDB-related funds and the OCR equity portfolio
return, thus improving the IsDB-related PURPOSE IsDB’s investment fund net income and subsequently the X The shift towards a new Investment arm has a renewed operations headroom. Management Framework is characterised business model by the adoption of a fiduciary asset METHOD management model for managing the in managing capital of IsDB-related funds, as stipulated investments of IsDB External fund managers by the P5P. This shift imparts greater X The investment policy statement of transparency to the objectives of IsDB’s trusts, endowment each fund will include multiple asset investment arm and ultimately ensures a classes, each having sub-classes, that focus on delivering superior risk-adjusted funds and the OCR will allow the overall portfolio to reach an returns to enable greater operational equity portfolio with efficient level of diversification. This means spending. that when choosing an asset class and the objective of constructing a portfolio, care is taken to X The Framework will contribute to de- achieving superior allocate an appropriate risk budget and to risking IsDB’s balance sheet and aims to be clear on the source of risk i.e. market, improve investment returns in line with risk-adjusted credit, sector etc. global benchmarks. returns, contributing X Within each asset class, a portfolio X IsDB developed new investment policies to IsDB’s broader of multiple external fund managers (with to enhance strategic asset allocation, mission and the P5P different investment strategies, investment bearing in mind diversification factors styles, risk factors, geographies, by managing risk. The policies paved the in all investment- sectors and currency exposures) will be way for new investments in growth asset related matters constructed. Both the first and second classes using external fund managers, level are the remit of IsDB. A third level of introducing better investment governance diversification is for each external manager processes and aiming to deliver superior to construct a well-diversified portfolio of securities to fulfil their investment mandates. IsDB will search for best- in-class external fund managers. This process is a lengthy one of due diligence, analytics and manager meetings to garner sufficient confidence in the ability of the fund manager to achieve IsDB’s investment goals. So far, IsDB has executed two major individually managed accounts (IMAs) with Franklin Templeton (STI Transform Fund) and Cambridge Associates (Waqf Fund).
X IsDB selected Franklin Templeton to manage a substantial part of the STI Transform Fund. This was done through a rigorous request for proposals (RFP) and due diligence process. Franklin Templeton was mandated to manage a multi-asset portfolio
[ 202 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
comprising a global equity smart board, IsDB can rapidly scale up its and IsDB is on track to achieve the beta strategy, a private equity growth investment operations capabilities medium-term return objective of the strategy, a broad sukuk strategy and to match the substantially more Fund. a low-duration sukuk strategy. So complex back-office operations far, the project has achieved positive required to support active, globally INVESTMENT returns, both relative to the benchmark diversified investment strategies portfolio and in absolute terms. employed by EFMs. Further, the X IsDB will be able to boost custodian banks provide IsDB with returns on the investments of all the X IsDB selected Cambridge analytic and reporting functionalities related funds (ISFD, Waqf, Pension Associates as an Outsourced Chief for portfolio monitoring and Fund and STI) and the OCR long- Investment Officer for the Waqf evaluation, namely performance term equity portfolio, unlocking Fund. Cambridge Associates will attribution, risk reporting, additional resources to deploy in manage a large part of the Waqf compliance, and fund accounting IsDB operations. In this regard, IsDB Fund by constructing a portfolio and reporting services. set a medium-term target of 6% for through best-in-class fund managers the STI Transform Fund with existing in the public equity, Real Estate X IsDB followed a prudent and endowed resources of US$ 100m. Investment Trust and Shariah- meticulous procurement and That translates to an average compliant Fixed Income space. selection process in the hiring of the US$ 6m annual operations envelope The mandate will see Cambridge global custodians. Thomas Murray, in support of STI start-ups and proof Associates appoint passive and a custody procurement specialist of concept funding in MCs. The ISFD active public strategies, combining advisor, was appointed to manage has set similar target returns and both separately managed accounts the RFP process. INV convened with US$ 1.5 billion earmarked for and co-mingled fund vehicles to a bid evaluation committee, with investments, an average of US$ 95m meet the return objectives of the representatives from all the relevant of resources will be available for Waqf Fund. departments (FCD, RMD, IMDT and the concessional window of IsDB, Treasury), to evaluate and select the which will be used to alleviate abject X INV has selected world-class global custodian. poverty in least developed MCs. asset managers and top-tier fiduciary managers to implement the X The new asset management ACHIEVEMENTS overall IsDB-related fund investments model will provide an additional portfolio using innovative open X IsDB has successfully developed quality assurance for donor partners architecture, with respect to cost the investment policies of Waqf to bolster the resource mobilisation optimisation and superior return Fund, Pension Fund and ISFD. Strong efforts of IsDB. This reflects the P5P objectives. investment policies are now in place objective to increase off-balance for all the funds and are now being sheet financing. X To enable the asset management implemented. model, IsDB has procured global custody and reporting services for X The reform package of the Waqf ISFD TARGET RETURNS the Waqf Fund, Pension Fund, and Fund has been pushed forward ISFD. This project culminated in with the appointment of Cambridge US$ 1.5 billion appointing two global custodians, Associates, who will deliver on HSBC and SocGen, for the the terms of the IMA and achieve are earmarked for safekeeping and servicing of assets superior returns for the Fund. of the Funds as well as other required investments and an average of services relating to compliance, X IsDB successfully implemented accounting and reporting. a multi-asset portfolio for the STI Transform Fund. This first-of-a- US$ 95 million X With both HSBC and SocGen on kind project for IsDB has seen it of resources will be available board, IsDB will be able to ensure procure a global custody solution access to global markets and for the STI Transform Fund from to alleviate abject poverty in encourage a high quality of service Standard Chartered that enabled —a key consideration in enabling the investment of the endowed the least developed MCs the strategic shift towards the asset capital of the Transform Fund with management model. Specifically, Franklin Templeton. The investment with the global custodian on performance in 2020 is encouraging
[ 203 ] SDGs
Business Continuity Management Framework
sDB practices business continuity management as a comprehensive process that highlights possible threats Iand their impact on business operations, leading to the development of organisational resilience through suitable responses and impact mitigation . A central aim is to protect both stakeholders’ interests and IsDB’s reputation before, during and after crises
experienced and effective business PURPOSE The main purpose of continuity (BC) teams through BCP X Business continuity management (BCM) BCM is to improve exercises and testing, including the IT is integral to the implementation of the P5P DR Plan and is defined as an operational framework organisational – Embed BCM within the organisation that seeks to: resilience through and create an ethos whereby building – Understand IsDB Group’s critical and resilience and mitigating vulnerability are core activities and staff in order to robust plans to regarded as aspects of normal business maintain the capability to resume respond to, manage process under strategic direction operations within agreed timeframes, – Increase risk awareness and horizon following the deployment of a and recover scanning contingency planning response from any sudden – Define roles and responsibilities of – Increase resilience by protecting departments and individuals in case of personnel and critical assets and data disruption of emergencies. (electronic and otherwise) through a business coordinated approach to management METHOD and recovery. X The main function of BCM in the X The key objectives of the BCM as an IsDB Group is to improve organisational enabler to the P5P are to: resilience through robust plans to respond – Maintain, develop and review BCM, to, manage and recover from any sudden business continuity plans (BCP), disruption of business due to events such Business Impact Analysis (BIA) and as natural disaster or terrorist or criminal the Information Technology Disaster attack, including cyber-attack, and to: Recovery (IT DR) plan and to utilise the – Maintain/upgrade rating and strengthen already completed achievements made credibility with clients and partners in this regard – Assess the risk of emergencies and use – Ensure that IsDB Group Headquarters this to inform contingency planning and RHs have knowledgeable, – Put in place emergency plans – Make information available to staff concerning protection, and maintain arrangements to warn, inform and advise in the event of emergency – Share information and cooperate with local and international agencies to enhance credibility, coordination and efficiency – Provide advice and assistance to businesses and partner organisations about BCM – Ensure the safety of staff, visitors and the local community in the Headquarters building and RHs’ premises well managed response activity.
[ 204 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
– IsDB Group critical staff and alternate critical staff were nominated – A fire drill and a BCM declaration took place in June 2019, in which critical staff moved to the designated alternate business site to resume business transactions – Contract was made with SOS company to facilitate travel advice, security support and medical evacuation of international staff.
INVESTMENT X IsDB’s investment in developing its BCM strategy is crucial to enabling IsDB to continue its operations in the event of a major incident and ensure, as far as practicable, that critical processes and resources are recovered before their non- performance threatens the long-term security of IsDB. The aim is to: – Maintain the reputation and credibility of the organisation – Complement the IsDB Group Risk Management Framework by identifying and planning for high- impact scenarios where BCM is the appropriate risk mitigation thoroughly reviewed and updated strategy ACHIEVEMENTS by BCM Task Force and approved – Provide a framework of X To date, the following by IsDB Group management management and decision achievements have been made: – The Risk Assessment document making that will result in an – The BCM Standing Committee was reviewed and updated by agreed recovery programme that was established, comprising IsDB the IsDB Risk Department and will minimise the impact of the Group management members the BCM Task Force members, event. – BCM Steering Committee was and approved by IsDB Group established, comprising all IsDB management Group entities’ representatives – The Logistic Crisis Guide, Crisis and reporting to the IsDB Group Communication Guide and ORGANISATIONAL ETHOS BCM Standing Committee disaster recovery documents – The BCM strategy was approved were reviewed and updated by the Building resilience – The BCP was updated in BCM Task Force and approved by cooperation with a best-in-class IsDB Group management and mitigating vulnerability consulting firm based on a BIA – IsDB’s Human Resources document Management Department issued should be regarded as aspects – An IT disaster recovery plan and a notification requiring all IsDB site were put in place staff to update their personal of normal business process – Several internal disaster drills information were undertaken in the buildings – BCM Task Force members were of the IsDB Group HQ trained in BCM, with all of trainees – The BIA document was certified to ISO 22301
[ 205 ] SDGs
Modernisation and total quality management of shared administrative services
s a major multilateral development bank active in 57 countries, IsDB needs a highly reliable and A efficient support infrastructure . IsDB’s shared administrative services play a crucial role in having an agile organisation that responds to emerging global trends
X Features of the TFM Service, which PURPOSE During the COVID-19 enables comprehensive facility services X Building an agile organisation underpins pandemic, IsDB through a single-source service provider, many of the key achievements of IsDB arranged for the include: with regard to the P5P. One of the P5P – A 24/7 helpdesk service objectives is building competency through successful return of – Contractor performance monitoring efficient delivery of services to all internal 223 stranded staff – KPI implementation and management business units that are, in turn, facing – Spare parts and warehouse external clients. members and their management – Customer support X As such, IsDB has embarked on several dependents from 29 – Quality Management System [ISO] initiatives to enhance competency in recent countries audits months. One of these is the implementation – Auditing of building structure with of a Total Facility Management (TFM) visual inspection and full structural Contract that aims to streamline IsDB’s investigation, using an Oracle system to services and improve the quality of existing manage the work facility services, while reducing total costs – Supply, operation and maintenance of at IsDB headquarters (HQ). photocopier machines and production machines for bulk copies – Hospitality services at HQ and other premises.
METHOD IsDB has enhanced and updated many of its administrative policies and procedures to align with the objective of reinforcement, as outlined in the P5P. Policies and procedures that have been approved, developed or enhanced so far include: – Implementation Policy for Fixed Asset Management, which manages all fixed assets under IsDB’s control through each phase of their lifecycle in an effective, efficient and economical manner – Approved Revised Corporate Procurement Policy, which complies with international procurement practices to deliver best value for money and highest standards of integrity and efficiency
[ 206 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
– Conducting health and safety precautionary awareness training for critical staff after the quarantine period – Arranging office cleaning kits with cleaning instructions and drinking water bottle cartons for critical staff on site – Deep-cleaning activities by all inhouse housekeeping contractors – Sanitising all surfaces, including elevators and copy machines, along with parking areas, mechanical rooms and other communal areas – Daily visit of engineers to IsDB facilities to check the preparedness programmes and ongoing projects.
INVESTMENT X IsDB has implemented a ‘Procure to Pay’ solution, which streamlines the whole procurement – IsDB Business Travel Policy and process right up to the payment ACHIEVEMENTS Guidelines, providing guidance stage. It covers strategic sourcing, for IsDB staff to enable them to A major area of focus for IsDB’s contract management and supplier conduct business travel effectively administrative services in 2020 management within a single – Emergency corporate was the COVID-19 pandemic and comprehensive solution on SAP procurement procedures its implications for IsDB staff and Ariba. to respond to situations of infrastructure. Actions and initiatives emergency quickly and effectively taken in response to COVID-19 risk X To improve efficiency and speed – The Safety and Security Manual, include the following: of response, the Administrative which has now been completed – Providing 2,000 staff with Services Department has automated – Back-to-office guidelines health kit, including 20 thermal all its process and services, in – New Vendor Code of Conduct screening devices for use by addition to fully digitising the – Records and Documents trained staff payment process using DocuSign Management Policy – Disinfection and spraying of and PDF electronic signature. – Guidelines for the hiring of premises on three occasions, consultants and procurement awarding this project to a guidelines for the RHs specialist company – Disposables Policy – Replacement of IsDB’s main RESPONSE TO COVID-19 RISK – Announcement guidelines entrance doors, switching from – Office space allocation guidelines a manual system to automatic Providing 2,000 staff – Agreement with International sliding doors SOS to provide travel advisory, – Requesting in-house operations with health kit, including 20 medical, security and emergency and maintenance contractors to support for staff during travel or identify their critical staff working thermal screening devices for international assignments within IsDB and imposing strict – A new SAP Travel Management conditions for their presence use by trained staff System for RHs to enhance the – Organising PCR tests for business travel experience for all staff staying in IsDB’s shared RHs. accommodation
[ 207 ] SHAPING NEW FRONTIERS
[ 208 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS Introduction Our MCs will face a multitude of tough decisions in the coming years in response to major challenges . One of these is the need to cater for a growing youth population, projected to increase by 100 million between 2015 and 2030, with a pressing need to find ways to cope with a worsening trade deficit in 22 out of 25 industries .
Various factors exacerbate this problem, not least the implications of the fourth industrial revolution, an estimated SDGs financing gap of US$ 1 trillion annually that dwarfs the available annual global Official Development Assistance funding of US$ 135 billion per year, and the outbreak in 2020 of the COVID-19 pandemic, which has challenged even the capacities of the world’s richest and most stable nations .
In response to these challenges, IsDB’s new business model introduces a completely revamped country engagement standard . It is based on building industry-led global coalition networks aimed at enabling orchestrated re-globalisation at an unprecedented scale, thus shaping new frontiers for sustainable growth in MCs .
[ 209 ] Global
[ 210 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
[ 211 ] SDGs
Reglobalisation: IsDB’s strategic positioning for the G20
wo important events marked the year 2020: IsDB was invited to the G20 as a ‘regional organisation’ under Tthe Presidency of Saudi Arabia, and chaired 2020 Meetings of the Heads of MDBs
efficient in times of crisis. This not only PURPOSE The G20 concluded makes globalisation more resilient but also X The year 2020 marked a key milestone its Leaders’ Summit inclusive of nations that have been left for globalisation, forcing the world’s in November behind historically. nations to make an important choice: to deglobalise or to reglobalise. In light of the 2020, and IsDB METHOD steady increase in the population, with at participated in least 40 million young men and women X IsDB enjoyed unprecedented annually entering the job market, and the over 120 meetings opportunities to support and participate acceleration of structural challenges as a in critical discussions while presenting the result of the fourth industrial revolution and across all working advantages of its new business model. the COVID-19 pandemic, the world sits at a groups under both crossroad with major trade-offs to make. X In December 2019, the Saudi Presidency Finance and Sherpa of the G20, which is the main forum for X IsDB introduced to the G20 a new tracks, including international cooperation, invited IsDB to strategic orientation that aims to create participate in its work under the theme for a feasible pathway for reglobalisation to all meetings of 2020: ‘Realising opportunities of the 21st make globalisation more resilient, smarter finance ministers century for all’. and more inclusive. It demonstrated how resilience in GVCs can be achieved and central bank X In January 2020, IsDB assumed the while maintaining optimal efficiency. By governors chairmanship of the Heads of MDBs capitalising on the intrinsic comparative Meetings, a forum that brings together advantage of developing countries, global the 11 largest MDBs in the world and the markets can have alternatives that are International Monetary Fund.
X To enable its global engagement and advocacy work, IsDB dedicated resources to: – Advocate its mission and vision – Provide expertise on global topics and knowledge of developing countries’ challenges – Foster improved coordination among MDBs in relation to G20 works – Build and develop strategic partnerships – Increase its global visibility and position itself as a world-class international organisation.
X With its intensive work during the G20 Saudi Presidency, IsDB developed and demonstrated significant capacity to contribute to the G20 agenda by conducting studies and surveys and providing expert opinion and recommendations to policy makers.
[ 212 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
X An internal coordination framework facilitated strong participation of IsDB delegations to G20-related events.
X A clear process flow and templates were developed to support and guide IsDB Group delegates in their participation in G20 meetings and events.
X A reporting mechanism was established, allowing for compilation of feedback and outcomes of the meetings.
X IsDB stands ready to provide X Engagement of IsDB experts similar engagement whenever its in 2020 G20 events also favoured MCs invite it to participate in future positive outcomes such as: international meetings related to – The acceptance of IsDB’s its mandate to support economic application to become an development and achieve the SDGs. implementing partner of the GPFI, with participatory finance now represented through IsDB in this ACHIEVEMENTS important forum Experts from IsDB have – Strengthening of relationships made 58 interventions in 2020 with other international G20 events and meetings and organisations in critical times, contributed to discussions with a reaching agreements with key total of 56 presentations and written partners, including WHO, UNICEF, submissions over the year. UNDP, UNOPS and the WFP – Active promotion of IsDB’s recent X IsDB published four reports on initiatives, including the 3-R leveraging key industries in the post- Programme ‘Respond, Restore, COVID-19 recovery. Restart’ to support MCs in their fight against COVID-19 INTERVENTIONS IN 2020 G20 X IsDB delivered three reports to the – Development of partnerships meetings of G20 finance ministers with organisations involved in the and central bank governors: G20 and its engagement groups, IsDB made 58 – A stock-taking study on including SEforALL, UN Habitat, ‘Best Practices of MDBs and the King Khalid Foundation, and interventions in 2020 G20 Specialised Multilateral Insurers in the International Dialogue Center Political Risk Insurance for Equity (KAICIID). events / meetings and Investments, Medium, and Long- Term Debt Investments and other contributed to discussions INVESTMENT Insurance Solutions’ – Two update reports on the X IsDB invested in building strategic with a total of 56 operationalisation of country relationships with the G20 Saudi platforms following the Secretariat and the chairs and co- presentations and written 2020-adopted G20 Reference chairs of working groups under both Framework for Effective Country tracks as well as engagement groups submissions Platforms in Somalia and and dedicated global experts to Uzbekistan. promote the priorities of IsDB MCs.
[ 213 ] SDGs
A post-COVID-19 unifying vision for MDBs
he COVID-19 pandemic has triggered a significant global shift in economic, financial, social and health T models, with profound implications on how MDBs operate
– Quickly containing the rise in infected PURPOSE Recent months patient volumes X The unprecedented magnitude of the have seen MDBs – Managing supply and demand pandemic’s impacts has jeopardised refocusing on the proactively the economic wellbeing of citizens and – Creating contingency for local institutions worldwide. It has also shown SDGs as they set production facilities and critical medical the lack of readiness of MCs to manage the new post-COVID-19 equipment, including testing anticipated scale of loss, both in population – Providing adequate treatment. and financial terms. trajectories METHOD X In this context, the role of MDBs is crucial in addressing the need to set up X The rapid reaction of the MDB community short-, medium- and long-term containment has already proved critical in managing and policy measures and regulations to pre- mitigating the COVID-19 crisis. empt future multidimensional crises. X In his capacity as the chairman of the X In addition, most of IsDB’s MCs will Heads of MDBs meetings for 2020, IsDB need to intensify investments in critical President chaired a brainstorming session healthcare infrastructure and systems in to chart the future of MDBs. the medium and long term. Areas for focus include: X Recent months have seen MDBs refocusing on the SDGs as they set new post-COVID-19 trajectories. In fact, MDBs are aware of the need to provide additional support to MCs to reposition them on the 2030 targets of the SDGs.
X Attainment of the SDGs at country level is affected by:
Micro-economic trends: – Shift to online and digital purchasing – Protect customers and employees from contracting or spreading COVID-19 – Flexible resource allocation – Take advantage of the close supply stores – Shift to value for money.
Macro-economic trends: – Progressive shift to regional/national value chains – Increase focus on improving health conditions – Scale up financial resources towards health infrastructure investment.
[ 214 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
X Both developed and developing – Accelerated infrastructure – Leveraging technological countries urgently need large-scale investment financing solutions quickly for the benefit of funding to help maintain economic – Unconventional financing MCs activity and jobs during the current – Infrastructure project financing. – Jointly implementing strategies pandemic. MDBs should: to provide access to clean and – Collectively devise future adaptive X MDBs also targeted SMEs, affordable technology strategies that will address an mid-caps working capital and – Unlocking untapped private anticipated paradigm shift from trade finance, and health sector sector financial resources and MCs response with a focus on financing turning them into bankable – Be ready to fill the competitive the acquisition of consumables and investments technological opportunity gaps medical equipment. – Enhancing political and economic – Envision new adaptive business governance models, with employee and X In order to speed up the – Establishing financial solutions consumer expectations fully disbursement of the approved funds that are best suited to individual integrated through proactive in priority to the most affected MCs going forward. and affordable technological countries, MDBs agreed to soften the architecture. lending and procurement rules and procedures as well as partnership X MDBs will need to invest heavily legal arrangements. in digitisation in the following areas: – Fintech solutions that can reduce INVESTMENT MANAGING AND MITIGATING costs of doing business, increase efficiency, allow firms and X MDBs pooled their efforts to THE COVID-19 CRISIS individuals to transact seamlessly secure an overall COVID-19 envelope and instantaneously, and enable a of approximatively US$ 300 billion MDBs have pooled their deep personalisation of financial (over 15 months) and US$ 3–4 trillion services is being provided by the International efforts to secure an – E-learning, e-commerce, Monetary Fund to support the e-banking, e-health technologies lending capacity of affected overall COVID-19 envelope and e-governance countries. – Powerful IT platforms that will of approximatively combine blockchain and artificial X To secure sustainable growth in intelligence (AI) to facilitate data- the countries they serve after the US$ 300 billion driven solutions and decision COVID-19 pandemic, MDBs will need making with greater convenience, to invest resources in addressing the over 15 months accuracy and speed following issues: – Country digital platforms for – Shifting the global supply chain to MDBs, MCs and other private and design new regional and national public entities to enhance the value chains close to the end-user The Heads of MDBs reaffirmed transparency and coordination of or consumer transactions – Rethinking a balanced that IsDB’s P5P focus on – Investment in new AI-powered socioeconomic development analytics to help predict the model that looks for equitable smart, green, impact of COVID-19 through a development and climate-change multitude of scenarios under mitigation technology inclusive and certain assumptions. – Protecting the workforce and the economy of each country resilient GVCs should (health, financial and economic ACHIEVEMENTS containment measures) be at the core of MDBs’ X The global responses of MDBs – Managing the overall economic, have been tailored to address the financial, social and health risks mandate in the future threat to life in a proactive manner. to ensure BC This has included: – Considering which investment – Short-term emergency health areas and labour polices will help sector financing drive productivity remotely
[ 215 ] SDGs
Governors’ Roundtable
sDB has embarked on a roundtable initiative as part of its quest for transformation and Ifuture-proofing of MCs
X The objectives of the roundtable are: PURPOSE The aim of the – To jointly confer on IsDB ‘s future X The population of IsDB’s MCs is roundtable discussion strategic direction and priorities estimated to increase to 2.2 billion by 2030, process is to advance – To underline the role of national from 1.7 billion in 2015 (i.e. by half a billion governments in creating favourable people). MCs’ transformative conditions for IsDB to operate as an agendas by effective player in the transformation of X The number of youth labour force (aged its MCs. 15-30), which will continue to represent leveraging their most entrants to the workforce, will METHOD increase by 100 million during the same knowledge on period. Almost 80% of this growth will aspects such X IsDB’s new business model and P5P happen in urban areas, resulting in an have enabled the coordination of efforts expansion of the urban population to 56% of as engaging the leading to comprehensive transformation all inhabitants of MCs. This is coupled with private sector and of the end-to-end value chains in selected a widening annual financing gap, estimated industries in which MCs have current or at US$ 1 trillion, to meet the SDGs. civil society while future comparative advantage. ensuring top-down X In response to these challenges, IsDB However, these steps forward are arranged a structured annual Governors’ ownership of the threatened by a number of significant risks Roundtable, which was launched on the new transformation facing MCs, ranging from the impacts of occasion of the IsDB 43rd Annual Meeting recent and emerging trends in geopolitics, in Tunis in 2018. The roundtable assembled agenda technology and employment to the long- again in Morocco in 2019. term effects of the COVID-19 pandemic and climate change.
X To help its MCs steer away from these risks while leveraging the benefits of its new approach, IsDB decided to organise an annual Governors’ Roundtable to enable MCs to share their experiences and agree on the top priorities of the institution for the year ahead.
X Topics typically include: – Putting in place the right legislative and regulatory framework for private sector participation – Guiding technological and innovation choices – Mechanisms of consensus building and programme formulation – Creating safeguards to ensure social responsibility and broad-based participation. – Ways to engage the private sector to
[ 216 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
– The need to undertake the process of industrialisation by upgrading value chains using natural endowments and building on latent and revealed comparative advantages – The need to adopt rapid technological development as an essential means to create environment-friendly and sustainable growth, making innovation a prominent feature in the process of structural change – The need to support the rise of the middle class to create close the US$ 1 trillion financing from participants how they have economies of scale that justify gap of MCs to meet the SDGs managed to achieve success in incurring high investment costs, – Ways to engage in smart their development goals and what with promotion of intra-OIC industrialisation to participate experiences can be transferred to trade and creation of regional in the 4th industrial revolution other MCs. markets that can sustain broader (Industry 4.0) value chains and higher internal – Ways to build inclusive X In 2018, the roundtable managed demand. economies to absorb 10 million to align MCs on the key three new job market entrants annually. existential challenges that they are INVESTMENT facing in the run-up to 2030 and that X The Governors participating in can serve as priorities/goals for IsDB X IsDB increased its allocation to the roundtables are asked several Group to provide a response with the new business model to 40% of questions to help determine the key a new business model to address the Annual Operations Plan and will factors of success in their countries: them. gradually increase it to 80%. – What are the salient features of your country’s transformation X In 2019, the roundtable journey, main milestones, reflected MCs’ endorsement of ROUNDTABLE DISCUSSION success stories and impact of the IsDB management response to economic transformation? the priorities of its new business How to build inclusive – What are the specific challenges, model ‘Making Markets Work for obstacles and/or barriers to Development’. economies to absorb broad-based participation of the private sector and third sector in X Thanks to these roundtables, the economic transformation in IsDB received insights into the core 10 million your country (from planning to markets to focus on, which led to five new job market entrants execution)? core industries that are fundamental – How can IsDB partner with you to to job creation in its MCs: annually? share or receive your experience – Food and agribusiness industries among MCs to create new global – Textile, clothing, leather and market linkages? footwear industries How to engage the private – Petrochemicals and petroleum X Governors are also asked to make industries sector to close the recommendations on how IsDB can – Construction and construction- help them to continue with their related industries transformation journeys. – Islamic finance. US$ 1 trillion financing gap to meet the X The discussions with the ACHIEVEMENTS Governors incorporate a deep dive SDGs? X A key achievement of the into the three dimensions of IsDB’s roundtable process is finding out GVC approach:
[ 217 ] SDGs
MDBs’ first joint report on SDGs contributions
o mark the beginning of the Decade of Action in 2020, IsDB President, as chair of the 2020 Meetings of THeads of MDBs, proposed the publication of a joint report on financing the SDGs
X As the world seeks to recover from the PURPOSE The MDBs’ joint COVID-19 crisis, focus on the SDGs must X With just ten years to go before 2030, report presents be renewed. In line with the Linkage pillar the start in 2020 of a Decade of Action to a new vision of of the P5P, the joint report outlines MDBs’ accelerate progress on the SDGs coincided efforts in each of the 17 SDGs, reflecting with the COVID‑19 pandemic, raising deep development for their respective mandates and comparative questions about prospects for achieving all countries, advantages. this ambitious agenda. highlighting the X National and global leaders have X Following a proposal made by IsDB's importance of recognised both the opportunity and the President, who had chaired the meetings of responsibility to ensure that recovery efforts the Heads of MDBs during 2020, this Group partnerships to support the SDGs. This was emphasised — comprising the 11 largest MDBs and the mobilise financing at various forums, including the G20, International Monetary Fund — launched a the high-level process on “Financing for report on their contributions to the SDGs. for sustainability Development in the Era of COVID-19 and Beyond”, co-convened by Canada, Jamaica and the United Nations General Secretariat in May 2020, and the Finance in Common Summit held in November 2020.
X In this context, much is expected from the MDBs, while more needs to be done so that their current role in financing the SDGs is fully recognised. It is therefore timely for the MDBs to communicate their contributions to the 2030 Agenda.
X The report has increased the visibility of MDBs’ efforts to support countries in achieving the SDGs, and promoted an appreciation of their role, including in the context of supporting responses to, and recovery from, the COVID-19 crisis.
METHOD X The proposal was developed following discussion at the Sherpa meeting. It was suggested that IsDB further develop the proposal jointly with the Asian Development Bank, the current chair of the MDB working group on Managing for Development Results, for which reporting on the SDGs is an ongoing workstream.
X At the first Heads of MDBs meeting
[ 218 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
the world seeks to recover from the COVID-19 crisis.
X The report is driven by the examples and case studies proposed by designated focal points from each of the MDBs.
X Further convergence on common approaches would allow a more cohesive picture of the MDBs’ coordinated contributions to be presented in the future. Following IsDB’s original proposal, future chairs of the Heads of MDBs meetings could consider producing an update to this report during the Decade of Action.
INVESTMENT X Investment was made by all members of the MDB group to provide input and review.
X Further investment from ADB and IsDB was made on developing the report.
held in April 2020, IsDB’s proposal to mobilise financing and demonstrates MDB ALIGNMENT develop the report was supported. how MDBs embody SDG 17 Based on a mutually agreed outline, (Partnerships for the Goals) through The heads of the 11 largest each MDB designated focal points TA, policy support and knowledge. to provide inputs to the report, which MDBs and the IMF have was compiled by the two chairs, IsDB X The publication lays down some and ADB. of the commitments to continuing come together to showcase to work together to bring the world X Consistent with the Awareness closer to realising the 2030 Agenda their commitment and pillar of the P5P, the joint report for Sustainable Development, showcases examples of how MDBs’ including by advancing common contributions to the SDGs financing directly contributes to approaches to results management. advancing the SDGs relating to empowerment, safeguarding the ACHIEVEMENTS planet, fostering prosperity for The MDBs embody all and developing sustainable X This first joint report by MDBs infrastructure. on their contributions to the SDGs SDG 17 showcases collective support for X The report indicates the critical the 2030 Agenda to shareholders importance of partnerships to and stakeholders at a time when
[ 219 ] SDGs
Future of the finance industry
ow economic growth, high debt levels and low interest rates have been compounded by fragility contexts L and the COVID-19 pandemic . IsDB’s ‘Future of Finance’ report addresses these issues as part of its ‘The Future’ publication series, which forecasts economic trends, disruptive technologies and emerging global priorities and their impact on the financial industry for the benefit of MCs
– Lowered barriers to entry are PURPOSE Emerging intensifying competition, to the benefit X Strong trends are identified in the technologies of customers Report, as the traditional business model of will improve the – Cloud computing, distribution across banking institutions is challenged by fintech different digital channels and increased and large tech companies. Among these collection and digitisation are encouraging financial trends are: distribution of services customers to switch to direct – The adoption of environmental, social banking and fintech and governance criteria by institutional charitable funds – FIs can operate in a similar way to investors consumer companies with multiple – The adoption of impact investment with greater points of access and can optimise their mechanisms by social finance transparency, distribution model to expand their reach institutions beyond the traditional customer. – The progressive integration of disruptive monitoring and technology by private and public control, driving X Behavioural shifts are shaping access institutions to further support the SDGs to social and environmental finance: framework. more generous – Through increased awareness of participation social and environmental imperatives, X Technology is reducing the entry cost pushing actors across the spectrum to for new players: internalise non-financing goals in their decision making, creating investment opportunities and redefining investment criteria – Through concerted efforts between development, humanitarian and FIs to mobilise alternative finance (philanthropic and charitable) via crowdsourcing platforms.
X Payment systems have benefited greatly from new technologies and fintech: – New digital payments are providing consumers and businesses with seamless payment ecosystems, increasing speed, accessibility and efficiency.
X Technologies such as blockchain are now used for fast and secure crossborder payment, clearing and settlement. Cryptocurrencies and digital money are fast, secure and low-cost. If better regulated, they have the potential to replace cash in future.
[ 220 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
sectors of our MCs, economic policy – Countries in the medium- METHOD needs to be geared towards achieving readiness category should X The overall aim of this Report is greener and fairer economic growth. focus on financial inclusion and to take stock of the global disruptive capitalise on existing resources to trends and propose forward-looking X The government policy apparatus, improve economic diversification new approaches to bring about including taxation, spending and and build the needed human a fairer, more stable and more regulations (especially those related capital sustainable financial industry: to the financial institutional and – Countries in the low-readiness – Through the development regulatory environment, monetary group should focus on improving of better policy tools and policy and social policy) must improve governance and build trust in the instruments, and of a more social and environmental outcomes. system through education and conducive institutional and reforms. regulatory framework to achieve X IsDB invites its MCs to help socially optimal outcomes develop innovative fiscal and X Another prospect explored by – Through faster and greater monetary policies that will enable the Report is the potential to form technology adoption by the a better alignment with the welfare an Islamic merchant organisation, financial industry to improve its objectives of the economy. The which could: efficiency, customer experience, proposed policies will be based on – Enable fairer and more controlled inclusion and fairness. the shared universal objectives of risk distribution in the economy prosperity, stability and fairness and – Leverage emerging AI and X The objectives of IsDB’s new will be tailored to the circumstances blockchain technology to remove programming framework are to: and aspirations of participating some of the barriers preventing – Design a financial framework countries. participative banking conducive to Islamic and ethical – Use low-cost, high-efficiency finance institutions to better X A Welfare Economy Policy tools to considerably lower respond to modern needs Toolkit will serve as a starting point information asymmetry and and threats and redefine the that will help countries further adapt transaction costs from non-debt- developmental role of finance by and enhance in order to inform based transactions. rechannelling resources towards national policies. economic sectors and segments INVESTMENT with the highest potential for X IsDB will invite MCs to work sustainable value creation together on piloting policy X IsDB has increased its allocation – Set in motion transformational recommendations in order to towards the new business model trends and practices which will generate evidence that can support to 40% of the total annual work transform the way finance- the mainstreaming of such policies programme financing envelope and sensitive government policies more widely. will gradually increase it to 80%. operate and broaden the policy toolbox to develop a productivity- X The new framework advocates focused financial industry more strategic deployment of public capable of helping MCs attain funds through innovative financial STRONG TRENDS IN FINANCE their developmental aspirations instruments (such as tokenisation – Achieve financial deepening and crowdfunding) and mechanisms SDG financing needs, and promote equality and (including blending and de-risking). environment-friendly and climate emergency and development-focused FIs that X It divides countries into three are agile, efficient and ready to categories in terms of their strategic mounting inequality integrate Industry 4.0 technologies orientation to the financial system: to solve MCs’ challenges. high readiness, medium readiness will drive the financial sector and low readiness. It suggests that: – Countries in the high-readiness POTENTIAL IMPACTS to reconsider its prioritisation category should focus on X If IsDB is to help unlock the digitisation, moving towards and allocative mechanisms potential of finance for delivering the sustainable finance and setting ‘Industry 4.0 revolution’ and to bridge guiding principles for others to the financing gap in the key economic follow
[ 221 ] SDGs
Future of the agri-food industry
rowing populations in many IsDB MCs means that substantial production increases are required going Gforward . Meanwhile, the COVID-19 pandemic has underlined the need for resilient and robust agri-food value chains . An ‘Agri-food’ report addresses these concerns as part of IsDB’s ‘The Future’ publication series, which forecasts economic trends and emerging global priorities for the benefit of MCs
X IsDB has identified innovation and PURPOSE IsDB is proactively private sector involvement as crucial to X The agri-food sector is fundamental rolling out a improving the future competitive position to many MCs. The COVID-19 pandemic programming of MCs. has brought a new set of challenges and opportunities and reinforced the need to framework that X Value chains are under pressure to build resilient value chains in the future. aligns MCs with the become more sustainable, resource- efficient and transparent. This offers MCs X The next decade is likely to be marked future of agri-food, an opportunity to enter new markets and by soaring food demand, shifting consumer increase the value-add of their products. preferences, resource depletion and rural leveraging industry exodus. 4.0 technologies to X Unless decisive action is taken on innovation and more sustainable farming X While MCs are significant agricultural meet productivity techniques, climate change and resource- producers, many are not very advanced in levels and depleting agricultural practices will hit food processing, causing them to miss out MCs hard, limiting output and putting food on the most lucrative segments of agri- expectations for the security at risk. food value chains. 2030 markets X Shrinking economic opportunities will X To respond effectively to global calls for continue to fuel a steady rural exodus in sustainability and quality standards, the many IsDB countries. To prevent lasting agri-food sector needs to transform itself. damage to their agri-food production potential, these economies need investment and innovation in the agri-food sector to provide young workforces with jobs and skills.
X The IsDB agri-food programming framework highlights all of these issues and offers solutions and practical steps for MCs.
METHOD X Agriculture already contributes in large part to the GDP of IsDB MCs and this is set to increase in future. As demand rises globally due to an expected 800 million increase in the world’s population by 2030, MCs need to take action now to create additional resources, increase their productivity and transform their business models in order to support stable growth and innovation.
[ 222 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
productivity and mechanisation – The availability through IsDB of are too low to lift most farmers joint project financing and risk out of subsistence agriculture. sharing as well as access to high-level decision makers to X It highlights: incentivise collaboration – The need for productivity – The way affordable low-tech champions to invest in innovation innovations can boost resource and sustainability to maintain efficiency and productivity output and expand market share (for example, modern drip – The potential for production- irrigation systems can increase focused countries to expand their non-flooded rice yields by up processing footprint to increase to 30% while reducing water their share of market value consumption by 50%) – The opportunities for domestic – The way digital solutions can be markets to increase productivity leveraged to improve farmers’ through mechanisation and scale, living conditions and incomes, to eliminate food insecurity and connecting them to the value X The new programming framework meet national demand. chain reveals that there is significant – The role of cooperative leasing untapped potential in production models in enabling mechanisation ACHIEVEMENTS capacities of IsDB countries, such and strengthening smallholders’ that: X The framework lays the productivity by connecting – MCs are losing out on value groundwork for MCs to achieve lenders, equipment providers and creation through massive food their required targets in agri-food farmers to drive mechanisation. wastage along the value chain production. By taking decisive and – Infrastructure investments, better innovative actions, MCs can: INVESTMENT farm management and education – Generate additional agri-food of smallholders can significantly exports worth US$ 380 billion X IsDB increased its allocation boost agricultural output – Transform the labour market, towards the new programming – There is potential for MCs to improving qualification and framework to 40% of the Annual boost value creation by expanding income levels for 170 million Operations Plan and will gradually their food processing activities people increase it to 80%. – While MCs currently have – Eradicate severe food insecurity a limited presence in food for at least 40 million people. X As a first step, IsDB published processing, there are a report on the likely future of the opportunities in both primary and X To help MCs achieve these industry in the post-COVID-19 era. secondary processing for higher outcomes, the framework also value creation in many industries. addresses: – The extent to which management MEMBER COUNTRIES CAN X The new programming systems can offer potential framework sets out the opportunities to improve sustainability in Generate additional and challenges facing IsDB MCs. It production recognises that: – The control measures that agri-food exports worth – Productivity champions among need to be introduced to stop IsDB countries display high levels deforestation and loss of of agricultural productivity and biodiversity, given that farmers US$ 380 billion are integrated into the GVC often lack TA and know-how – Production-focused countries – The importance of private have well-established agricultural sector involvement in driving Transform the labour market, sectors, but lack productivity, the expansion of value-adding processing capabilities and processing to yield higher value improving income levels for adequate infrastructure creation, with a focus on risk – Domestic-focused countries sharing and cooperation models 170 million people are heavily dependent on between the private and public farm output, but their levels of sectors
[ 223 ] SDGs
Future of the petrochemical industry
he petrochemical sector contributes approximately US$ 5.7 trillion to global GDP. IsDB MCs contribute Tonly 22% to petrochemical output although they hold nearly 60% of global oil and gas reserves . IsDB’s ‘Petrochemicals’ report addresses this concern as part of its ‘The Future’ publication series, which forecasts economic trends and emerging global priorities for the benefit of MCs
– Create thousands of highly skilled PURPOSE To benefit from jobs, with positive spill-over effects X The COVID-19 pandemic has brought the growth in the in education, governance and overall unprecedented challenges, with the petrochemical industrial competitiveness. potential to change the overall structure of the petrochemical industry, especially sector, MCs need X Over the next decade, demand for in MCs that consume or produce to move beyond petrochemicals is expected to continue to petrochemical products. grow. However, to reap the benefits of this producing base growth: X The report shows how MCs can build – Growth must be accompanied by resilient petrochemicals value chains for chemicals and deeper integration along the value chain the future. It produces a programming commodity and development of a broader product framework that recommends actions MCs portfolio to increase value creation in should take to create additional capacity, petrochemicals, the future increase their productivity and transform to adding value – Tailored strategies are needed to their business models in order to support increase petrochemical value creation stable growth and innovation and also: through secondary across all MCs – Become more self-sustaining by processing to – Private sector investment and reducing dependence on petrochemical collaboration among IsDB countries will imports from non-MCs produce engineered be of increasing importance to foster – Double their value creation by exploring plastics and value creation in petrochemical sectors. primary and secondary processing and leveraging their access to petrochemical chemicals METHOD feedstocks such as oil and gas X Despite declining demand for petrochemicals in 2020 due to the COVID-19 pandemic, a growing global population and increasing income levels will drive overall petrochemical demand upward in the long term, according to the report.
X In this context, IsDB’s new programming framework for the industry emphasises the following: – Capacity optimisation and efficiency gains should be the focus, as long-term and capital-intensive investment cycles force industry players to concentrate on optimising current processes – End-user industry demand will determine the future of petrochemicals, with changing customer needs and demand from end-user industries causing the sector to become more sustainable
[ 224 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
to foster local end-user industries as petrochemical production strives to stay close to sources of demand – Stimulating industrialisation in MCs can attract end-user industry demand, leading to growth in the local petrochemical industry – Investment in a skilled workforce is a vital aspect of building a petrochemical industry, with technical and vocational – Access to key feedstock remains – While some are ready to move education and training key to success for MCs operating into high-value speciality aligned with the needs of the in the petrochemical sector. chemicals, others should focus petrochemical industry on opportunities to create the – Financing opportunities and X Overall, IsDB recognises three most favourable conditions under intercountry collaboration major challenges for the sector: which to grow their petrochemical can give MCs a comparative – Volatile raw material prices and industries advantage. market environments – Countries with little access to – An innovation gap in sustainability feedstock can focus on attracting INVESTMENT – Tightening regulations. secondary processing – Many MCs can leverage the X IsDB increased its allocation X Despite their strategic advantage advantage of feedstock access to towards the new programming when it comes to feedstock access, add value at the higher end of the framework to 40% of its Annual many MCs risk missing out on petrochemical value chain Operations Plan in 2021 and will opportunities to add value in the – All MCs can act in the two gradually increase it to 80% by 2023. sector. Below are some of the key dimensions of domestic demand factors that shape IsDB’s new and vertical integration to drive programming framework: their petrochemical activities – MCs’ limited capabilities forward in primary and secondary – Countries will benefit from taking processing can be boosted by action to improve education, stronger domestic demand governance, resources and – Overall, end-user industries will job creation to sharpen their MEMBER COUNTRY ACTION see demand increase, providing comparative advantage in MCs with new opportunities to petrochemicals. MCs will benefit from shape their petrochemical industry – Demands for sustainability are X The industry has the potential taking action to improve increasing, but fossil feedstock to drive smart and strategic such as from oil and gas will investments along the lines of the education, continue to dominate following priorities: – Bio-based materials are gaining – Countries can enhance their governance, in importance due to MCs’ need competitiveness by investing in to meet their environmental the required infrastructure for resources and obligations and achieve their the export-driven petrochemical targets under the SDGs. industry job creation – The investment needed to improve the petrochemical POTENTIAL IMPACTS to sharpen their competitive infrastructure in MCs requires X The new programming framework collaboration between national edge in petrochemicals documents a variety of different agencies and international donors positive outcomes for MCs engaged – The key to attracting in the sector: petrochemical players in MCs is
[ 225 ] SDGs
Future of the mining and construction industry
he mining and construction sectors will see major transformations by 2030 due to demand driven by Tgrowing populations, increasing urbanisation rates, rising e-mobility and increased dependence on electronics . IsDB’s ‘Mining and Construction’ report addresses these concerns as part of its ‘The Future’ publication series, which forecasts economic trends and emerging global priorities for the benefit of MCs
X The COVID-19 pandemic is expected to PURPOSE The Mining and considerably shape the future of the mining X IsDB is committed to helping its MCs Construction report and construction industries. Its effects will to leverage their resources and position demonstrates the be felt by MCs’ economies in the short, to develop and grow their economies medium and long term. To manage these in the future, taking advantage of new power of industry impacts, MCs need a deeper understanding technologies. Resiliency and readiness are partnerships to of complex value chains in order to rebuild key to MCs’ competitiveness and capacity with resilience. to benefit from these changing dynamics. unlock potential in X IsDB’s Mining and Construction report X The mining and construction sectors MCs while partially offers an in-depth view on key trends and are fundamental to many IsDB economies. hedging for risks initiatives that will shape the future of the Adopting a forward-looking industrial policy sector in its 57 MCs for the next decade can enable MCs to capture more value and beyond. from mining and construction through: – Higher revenues X The report identifies several key – More diversified economies elements in the two sectors: – More skilled jobs. – The rise of new technologies and disruptive innovations such as autonomous vehicles, Internet of Things (IoT) connectivity, robotics and 3D printing promises to bring drastic change to populations around the globe – Disruption is inevitable — several innovative technologies and techniques will enhance productivity – Increased reliance on critical minerals and materials will boost demand across the mining and construction sectors – Many MCs hold vast mineral reserves that remain untapped, with significant potential to increase production – The focus on extraction in some MCs means that there is potential to unlock additional value by expanding into processing and even manufacturing.
X According to the report, there are several opportunities to turn the key challenges facing MCs into competitive advantages. It advises MCs to take a stance as either early adopters or innovation leaders to create competitive advantages. In addition, it emphasises
[ 226 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
the crucial role of the private sector suggests that improvements can account for approximately 17% of in the development of the mining be made by addressing investment global GDP, compared to about and construction sectors, with new gaps, poorly developed infrastructure 15% today collaboration models to help share and inadequate workforce – Create additional skilled jobs, risk and unlock growth potential. qualifications. both directly and indirectly, especially through expansion into processing, which could triple METHOD POTENTIAL IMPACTS the number of employees in the X The COVID-19 pandemic will X Opportunities for MCs to achieve sector reshape global demand in both the their goals for productivity and – Turn MCs’ construction trade mining and construction sectors. sustainability are outlined in the deficit into a surplus. Growing population and increasing report, with the following trends urbanisation levels will continue highlighted: X In the mining sector, MCs hold to drive demand in both sectors, vast mineral reserves and the focus while shifting consumer behaviour X The importance of mining and of investments should be on finding is expected to boost demand and of most minerals is expected to ways to access renewable energy criticality for minerals. It will also increase. There is considerable generation (solar, hydro, geothermal) drive changes in consumption potential to increase production as a cost-effective solution. patterns and labour market habits. in several MCs based on high, Key industry trends identified by the untapped proven reserves. X Investment programmes for report include: SMEs and start-ups can provide – Improved productivity through full X The construction industry is the necessary ecosystem for automation of large-scale mines projected to grow by 50% by 2030, technological innovation. – Normalisation of technological exceeding global GDP growth, innovations such as autonomous with the picture looking especially vehicles, robotics and workforce promising for MCs in West Africa, the CONSTRUCTION INDUSTRY augmentation Middle East and Southeast Asia. – Increased reliance on advanced Growth projection of 50% analytics and IoT enabling data- X There are strong regional driven decision making opportunities in construction by 2030, exceeding global – Widespread adoption of materials production for MCs that innovative and digitally integrated can establish national capacities to GDP growth. construction methods meet domestic and regional demand. – Phasing out of traditional construction methods with X Aluminium and nickel show High growth rates expected the growth in highly productive significant growth potential. The solutions, such as 3D printing and surge of electric vehicle (EV) modular construction technology and nickel’s role as a in MCs, particularly in West – Rise of Building Information primary source for batteries will Modelling to tackle complexity significantly drive demand. Africa, Middle East and across the construction lifecycle – Emphasis on improving X Expansion from the current focus Southeast Asia environmental footprint on extraction into processing and
– Alleviation of mining impacts manufacturing can unlock additional MINING INDUSTRY through stricter regulation, value for MCs. gradual shift to renewable energy sources and increased focus on The surge of technology INVESTMENT EV recycling – More energy efficient solutions X The report demonstrates how and nickel’s role as a primary and alternative fuels in the early decisive action can enable MCs construction sector. to: source for batteries will drive – Capitalise on the overall growth X The report identifies low of mining and construction, demand significantly industrialisation levels as the expected by 2030 to cumulatively main hurdle facing many MCs and expand by US$ 7 trillion and
[ 227 ] SDGs
Future of the textiles and apparel industry
lthough the COVID-19 pandemic holds short- to medium-term risks and vulnerabilities for the textiles and A apparel value chains in IsDB MCs, there are many longer-term opportunities for the industry to bounce back . IsDB’s ‘Textiles and Apparel’ report addresses these issues as part of its ‘The Future’ publication series, which forecasts economic trends and emerging global priorities for the benefit of MCs
X Collaboration with industry PURPOSE For MCs in the associations within and across countries X With a market size of US$ 2.2 trillion and textiles and apparel is identified as an important factor. In an expected annual growth rate of 3.5%, the industry, GVCs are particular, joint projects with universities textiles and apparel industry holds great can lead to knowledge exchange and drive potential for MCs. an important part innovation. of their business X However, to achieve success, MCs X The report also highlights the must navigate major market disruptions. model. The report importance of partnerships with brands These include innovations in automation and knitting houses or weaving mills, with and digitalisation, as well as the rise of new indicates how a view to fostering more vertical integration sustainable materials. countries are for companies in MCs.
X The report documents the many ways performing at METHOD in which changes in the industry could diverse stages of the shift the balance of power, providing X IsDB’s new programming framework opportunities for MCs to position value chain demonstrates how MCs can position themselves at stages in the GVC where themselves for success by: they can add higher value. – Boosting recycling and circular economy principles – Strengthening their standing and visibility as sourcing destinations – Using platforms such as industry associations and fairs for industry marketing – Considering IsDB’s collaboration models for PPPs, joint project financing and risk sharing.
X The report sketches out a range of futures for the textiles and apparel industry in MCs, taking into account a range of major trends. These include: – The growing importance of MCs in the processing side of the industry, driven by rising labour and production costs in China, as well as a relocation of some of the GVC to other countries – Digitalisation and new processing technologies that present opportunities for MCs, such as installing advanced textile- and apparel-making equipment such as laser-cutting, automated knitting or sewing robots
[ 228 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
textile fibres into finished products – Bangladesh imports raw materials that it then turns into products, and its business model has made it the world’s second-largest apparel exporter, accounting for 7% of total apparel exports.
INVESTMENT X The industry has the potential to drive smart and strategic investments along the lines of the following priorities: – Extending activities up- or downstream in the GVC to deliver additional value – Strengthening or broadening processing capabilities by engaging in networks with other suppliers – Vertically integrating further processing activities – Investing in state-of-the-art technology and digitisation – Developing more appropriate infrastructure and logistical support by collaborating with national agencies and – Materials competing against each manufacturing capabilities and international donors other globally, driving innovation increasing their industrialisation – Leveraging innovative technology in new fibres, which can represent levels. and new business models to a cost-competitive and better- drive sustainability, which is performing substitute for natural increasingly important for end POTENTIAL IMPACTS fibres customers and supplier selection – The increasing importance of X In terms of raw materials, MCs for international brands sustainability as consumers and produce 25% of global cotton, 26% – Investing in new machinery to brands become more aware of of wool and 15% of raw leather, and improve material utilisation, the environmental impact of eight of the world’s top 15 cotton- increasing suppliers’ revenue and apparel, putting pressure on MCs producing countries are MCs. The profitability. to tackle issues such as pollution new programming framework and water consumption demonstrates ways in which MCs – The need for established players can increase their market share: MEMBER COUNTRY PRODUCTION to focus on innovation and – Uzbekistan, Turkmenistan and consistent implementation of the Sudan focus mainly on raw In terms of raw materials, MCs SDGs material production but are – Emerging industry players’ need attempting to increase the added produce 25% of global for improved infrastructure and value of their respective domestic more financing options to capture textiles industries cotton, 26% of wool and their full export potential – Pakistan and Turkey produce – The potential for new market raw materials but have also 15% of raw leather entrants to gain strength increasingly integrated value by directing more FDI into chains vertically as they process
[ 229 ] SDGs
Blockchain-based Global Coordination Platform
he IsDB Global Coordination Platform is a blockchain-based online marketplace that aims to coordinate T aid delivery and mobilise financial and technical resources to support MCs
X The initiatives undertaken in this context PURPOSE In the past, the represent a response to the call of the Paris X Given its massive and overarching linkage between Declaration on Aid Effectiveness, whereby impact beyond the immediate health effects supply and three principles are implemented: mutual and the mounting economic and social accountability, country ownership, and ramifications, the COVID-19 pandemic demand was often alignment on results. response requires a holistic approach disrupted. The that charts an end-to-end recovery path, METHOD orchestrating work done by many partners Global Coordination domestically and internationally. X The GCP is an online free market system Platform provides a for development that allows MCs to explore X During the pandemic, the IsDB Global structured solution services offered by various providers Coordination Platform (GCP) has served worldwide, allowing them to take a structured as the strategic tool to orchestrate IsDB’s to this challenge approach to meeting their needs, by: SPRP. – Allowing MCs to reach out to different vendors and suppliers, which can be challenging, especially in times of crisis – Helping MCs to reach out to donors, experts and centres of excellence.
X Each country accesses the GCP through its own dedicated Country Platform (CP). Furthermore, each provider defines its contribution to the GCP in a structured way.
X The GCP reflects the values set out in several core aspects of the P5P:
X Enhancing IsDB’s visibility by creating an integrated and effective strategic communication tool for interactions with potential investors, donors and service providers – Strengthening partnerships with other MDBs and development institutions at both global and country level; having successfully onboarded a number of partners (UNOPS, UNICEF, UNDP, WHO, Standard Chartered Bank); giving MCs access to the latest scientific, technological and innovative products and enabling them to compete globally in fields where they have a competitive edge – Building capacities by accessing the knowledge of MCs; helping IsDB to produce development solutions that are
[ 230 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
Blockchain-based Global Coordination Platform
based on the genuine root causes banks and IFIs. This support will ACHIEVEMENTS of problems be fully backed with a sovereign – Enabling off-balance-sheet X The GCP successfully onboarded guarantee and priced according to resource mobilisation; over 30 MCs to cover urgent needs the IsDB pricing guidelines. streamlining the transfer during the COVID-19 crisis in 2020. of information from the CP X ICIEC and IsDB have jointly (demand-side) to donors/ X Through the SPRP, IsDB allocated launched the COVID-19 Guarantee investors (supply side) US$ 2.3 billion to MCs. Facility, an innovative programme – Ensuring speedy project providing US$ 2 billion in support of implementation through real and X Four UN agencies (UNOPS, WHO, the private sector. The facility will virtual field presence using a UNICEF and UNDP) came together to be implemented by the two entities participatory model. implement the SPRP package. to support COVID-19-hit industries in MCs and to attract cross-border X The GCP is powered by investments. INVESTMENT blockchain. Blockchain is a technology that can increase X Currently, the GCP is mobilising development impact by providing resources for the SPRP Restore track, GLOBAL COORDINATION transparency and reducing fraud, including financing for SMEs and trade PLATFORM FOR COVID-19 whilst enabling efficiency. It to sustain activity in core strategic enables organisations to create value chains, the aim being to ensure The platform helped allocate digital networks, where they can continuity of necessary supplies and transact securely and digitally in a other commodities (mainly to the decentralised manner without the health and food sectors). US$ 2.3 billion need for intermediaries. to MCs X ICD will act as the IsDB Group’s X IsDB sees blockchain as a execution agent for lines of finance The platform onboarded technology that offers considerable to MSMEs, while ITFC will be the potential and is strategically aligned Group’s execution agent for trade more than 30 MCs to cover with its strategic principles of finance operations. The projects will urgent needs during the crisis decentralisation and moving towards feature 12 to 18-month revolving being a bank of developers. financing lines through export-import
[ 231 ] SDGs
Country Platforms: fourth-generation development finance
sDB’s Country Platform employs a cutting-edge fourth-generation development finance approach and Iconstitutes the flagship implementation vehicle for the new MCPS
PURPOSE The CP concept has METHOD X IsDB’s new business model has led been received with X A CP is an independent investment to changes in its country engagement great interest by all vehicle established as a joint-venture strategy methodology to adopt an partnership between IsDB and MCs, approach centred around GVCs by MCs and industry with the specific objective to develop promoting development through better experts bankable projects, including public-private integration of MCs in the GVCs. partnership infrastructure projects among others, with financing support from X IsDB’s interventions focus on crowded-in private capital. While CPs resolving binding constraints hindering can be designed as regional institutions the development of the identified GVCs. covering several countries, at the initial Infrastructure development takes centre stage of the roll-out of the model, the focus stage as it is the most capital-intensive is on setting up single-country vehicles. sector (approximately 70% of funding CPs cover the full project cycle, including: needs) and has a higher economic – Conducting feasibility studies multiplier effect. It also blends with other – Structuring the concessions activities to address root causes and – Tendering infrastructure concessions unlock the potential of the value chain. out to the market – Contributing to the project equity and/or debt financing – Supporting the operations and maintenance together with a technical partner – Extending lines of finance as liquidity facility for value-chain players – Delivering emergency social projects.
X A CP is rolled out as a standalone investment vehicle (off the IsDB balance sheet) created under a special legal regime separate from the applicable corporate and commercial law of the jurisdiction(s) where it operates. It aims to benefit from privileges and immunities similar to those of IsDB.
X Each CP employs internationally accepted, transparent procurement standards, whereby market principles are adhered to, in order to achieve the best value for money through a competitive tendering process with a focus on total lifecycle costs.
X The initial equity of the CP, which is contributed by the MC and IsDB, is used
[ 232 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
to set up the vehicle (operational hindering private investment; X If necessary, the CP will have the expenses) and to prepare the new MCPS financing model was capacity to raise funds by issuing selected projects (from feasibility agreed through the CP for the capital market instruments (Sukuk) study to tendering stage). tourism and fishery industries in local or international capital – Morocco — It was agreed to markets. X In the span of 1-2 years, the CP develop the MCPS with a focus conducts the necessary studies to on agribusiness; discussions X Once all construction-related risks structure bankable projects with are continuing with the ITHMAR expire, the CP will have the capacity the help of consulting firms. The sovereign wealth fund to identify to recycle its capital through the objective is to de-risk the projects the potential for cooperation on sale of the reduced-risk assets. and provide the MC in question with CP entity IsDB will design tailored distribution a proposed risk distribution structure – Niger — MoU was signed to packages adapted to the appetite of that ensures value for money for the leverage the CP mechanism; institutional investors which can hold public partner and bankability for the modalities of implementation long-term assets in their portfolio. private partner. to be determined once the GVC projects have been identified X The CP oversees implementation – Nigeria — The CP model was of the portfolio until all repayments ACHIEVEMENTS met with interest by Government; are completed and will incorporate X IsDB engaged with 12 countries it was agreed to take the knowledge transfer and skills in 2019 and 2020 with the objective discussions forward in the development components to ensure of implementing CPs in Gabon, context of the MCPS that lasting effect is achieved in MCs Indonesia, Morocco, Turkey, Kuwait, – Senegal — MoU was signed to in terms of project preparation and Saudi Arabia, Senegal, Niger, Tunisia, start CP implementation with funding. Maldives, Guinea and Afghanistan. projects focusing on the energy and agriculture sectors; CP X IsDB is allocating 20–40% of its X The CP mechanism is currently discussion and implementation to annual financing capacity as seed under implementation and/or be coordinated with the Senegal funding to launch the CP model, and discussions with MCs, as follows: sovereign wealth fund (FONSIS) will gradually double it at a steady – Afghanistan — The CP model – Turkey — The CP model was pace. was adapted to support the presented to the Government, Afghanistan Self-Reliance followed by a technical discussion Acceleration Package; with the Turkish Development discussions are ongoing with Bank as a key partner to take the other development partners model into the implementation active in the country phase. – Gabon — The CP was established in October 2020 and operations INVESTMENT are expected to start in the CP GABON second half of 2021 with a X The CP investment in project sourced pipeline of projects in the preparation and development transportation and energy sector features a cost-recovery CP Gabon has been for an expected total financing arrangement with the MC’s amount of US$ 2.1 billion government, whereby projects operational since October – Indonesia — It was agreed to reaching financial close will see the focus on the automotive and CP investment transform into a stake 2020 and is building a agribusiness industries; the in the underlying projects’ special
CP is currently reviewed by purpose vehicles. US$ 2.1 billion the Government to provide recommendations on regulatory X As projects gradually mature strategic infrastructure and finance issues to the tender stage and financial – Maldives — Preliminary analysis close, project-level funding will be portfolio to upgrade the wood of Maldives investment climate sourced by tapping into the global and private sector development infrastructure investors at the and manganese value chains was conducted, identifying relevant risk-return profile (equity, challenges and bottlenecks hybrid, fixed income).
[ 233 ] SDGs
Programming for resilience in response to climate change and other challenges facing MCs
hrough various policies, strategies and publications, IsDB is building resilience for sustainable development that Ttakes account of the contexts and drivers of fragility, enabling more relevant and tailored interventions
– Address the drivers of fragility, ranging PURPOSE Effective from social and economic exclusion and X With 50% of the world’s fragile programming for marginalisation to unequal development populations residing in IsDB MCs, the P5P resilience requires – Learn from the experiences of other has a strong focus on resilience. It calls for MDBs. IsDB to find innovative solutions to support strategies for MCs to manage risks, shocks, stresses combating climate X IsDB is engaged in a range of activities and pressures posed by human-made and programmes to combat climate and natural disasters. As a result, IsDB change and other change. In this connection, it has developed has developed and launched a number of a Climate Change Policy to support the initiatives to help its MCs tackle challenges risks to be included drive to mitigate and adapt to the effects of to their resilience, from factors as diverse in programmes a warming planet. Comprehensive climate as climate change, conflict and the change guidance for several key sectors COVID-19 pandemic. and projects to has been prepared by the World Resources ensure that the Institute for IsDB, including: X IsDB has developed a Fragility and – Water sector guidance, which covers Resilience Policy, which aims to: drivers of fragility water resources extraction and – Set the strategic direction of IsDB in are addressed in conveyance structures, water treatment addressing fragility and conflict by facilities (including desalination), treated strengthening institutions advance water storage (tanks and basins), – Build resilience and contribute to social distribution networks and sewerage cohesion and sustainable development infrastructure in MCs – Energy sector guidance, which applies to energy sector projects including thermal power, hydroelectric power, solar and wind power projects as well as transmission and distribution projects – Transport sector guidance for roadway, railway and port projects, and urban mass transit projects.
METHOD X A number of tools have been introduced to address resilience issues in IsDB’s work in MCs: – Fragility and Resilience Analysis, an early risk and resilience assessment – Watching Brief (WB), which provides political, economic, social and environmental reporting on high- risk fragile and conflict-affected environments
[ 234 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
options, while focusing on the use – Sheds light on locally of climate risk screening tools to driven solutions and coping identify the key climate risk areas mechanisms in building the based on a project’s type and resilience of governments and location communities. – Providing insights into the process of identifying project X In 2019, the World Resources vulnerabilities and adaptation Institute sector guidance documents options for projects informed the design and formulation – Agreeing on a scale or metric for of components in more than 25 each criterion projects financed by IsDB towards – Scoring projects, incorporating building climate resilience of the different adaptation infrastructure and beneficiary alternatives against each of the communities in MCs. criteria – Evaluating options in greater X IsDB’s Climate Risk Management detail using a quantitative Framework is piloted in 2021, to – Transition Management and economic assessment. ensure that all climate risks identified Mitigation Strategy, which in IsDB operations are addressed. provides support for development X IsDB has published its first- Climate risk assessment case in fragile and conflict-affected ever annual flagship Resilience studies have been produced for all regions Report, which aims to assist relevant sectors. – RRP. stakeholders in planning efficient interventions and investments. INVESTMENT X Climate Change Policy supports Titled ‘Understanding, Investing & IsDB’s overall objectives of a client- Programming for Resilience’, the X IsDB’s new climate finance driven approach to sustainable Report highlights nine case studies targets require 35% of overall annual development and economic growth. (Indonesia, Turkey, Syria, Nigeria, financing to be committed to Its eight guiding principles are: Somalia, Jordan, Pakistan, Iraq projects and activities that mitigate – Country leadership and Palestine), providing concrete emissions and support adaptation – Selectivity and practical solutions for building to climate change. IsDB is taking – Adaptability resilience to cope with risks and various actions to ensure the – Proactivity shocks in MCs. financial sustainability of its climate – Capacity building and knowledge change interventions, including sharing assisting MCs to mobilise private ACHIEVEMENTS – Catalysing private-sector capital capital to finance climate change and institutional investors X By providing practical projects and leveraging the resources – Partnerships for climate change recommendations for increasing of its own private-sector entities. action financing and introducing tailored – Accounting for climate action. smart investments in building resilience to achieve the SDGs, IsDB’s ISDB’S NEW CLIMATE FINANCE X IsDB conducts climate risk first Resilience Report positions TARGETS screening at the early concept stage it to contribute to, and participate for all projects involving physical in, finding innovative solutions to 35% of overall annual assets, using the Acclimatise Aware address fragility and build resilience climate risk screening tool. This in MCs. The Report: financing is to be committed screening, coupled with project – Expands understanding of the impact assessments, establishes the challenges and opportunities to projects that mitigate climate change vulnerability context of building resilience by sharing of a project. knowledge, experience, best emissions and support practices and lessons learned X Sector guidance is implemented to enable MCs to manage the adaptation to climate change in the following ways: pressures, risks and shocks – Offering help with identifying posed by human-made and potential impacts and adaptation natural disasters
[ 235 ] Africa
[ 236 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
[ 237 ] SDGs
Guinea — A post-COVID-19 restart strategy
n Guinea, IsDB has analysed two industries to identify opportunities for upgrading or Ideepening their impacts on the economy
– Improving wellbeing, reducing PURPOSE IsDB’s GVC inequalities and ensuring X Guinea is richly endowed with natural participation index intergenerational equity resources but faces major challenges summarises the – Undertaking the structural in reaching its full potential through transformation of the economy by participation in GVCs. Analysis based on importance of increasing the share of manufacturing GVC selection methodology has identified the global supply value added in GDP and total exports. four champion industries for the country: – Agribusiness chain for the X In order to enhance the competitive – Mining country for which performance of the selected industries, – Rubber IsDB’s GVC analysis will document: – Chemicals. it is calculated. For – Required interventions Guinea, the data – Policy measures X Based on discussions with the – Support programmes required. Government of Guinea, agribusiness and gathered suggests mining were chosen as the main champion the country can METHOD industries. achieve important X IsDB’s GVC analysis methodology (see X The government of Guinea is actively page 170) was used to identify the key promoting and supporting the agriculture gains in mining and action points for Guinea. and mining industries with the following agriculture objectives: X Guinea is a country that has considerable mineral wealth. Its iron ore resources are among the largest and highest quality in the world and its reserves of bauxite represent about one third of total global resources. However, Guinea exports 95% of its bauxite in raw form and has not managed to exploit its other mining resources to the fullest extent possible.
X Agriculture is the main source of employment in Guinea. The country also has high potential in hydropower generation. However, the level of production in these sectors is well below the potential identified by IsDB.
X Preliminary GVC analysis for agribusiness yielded the following conclusions: – Guinea is a country with domestic market potential due to its high labour intensity and lower productivity combined with high employment in agriculture
[ 238 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
– Participation of local SMEs in the mining sector – Access to finance for local SMEs in both mining and agriculture – Human capital improvement for better outcomes in both mining and agriculture – Sustainable use of natural resources through environment- friendly production and processing.
INVESTMENT – The preliminary selected value country produces an annual chains are seafood/aquaculture average of 9 tons of gold, X IsDB’s GVC analysis found (fresh, dry and smoked fish), although the potential reserves that investment in the food crops horticulture (fresh and chilled are estimated at 700,000 tons. segment will contribute directly fruits and vegetables) and cash to rural poverty reduction for crops (cocoa, groundnuts, coffee X Guinea is home to the world’s smallholders and food security for and rubber) largest untapped iron ore deposits, the country. – Cash crops have significant which could transform the country’s export potential and could present economic landscape. X Increased investments in mining profitable business opportunities have already contributed to Guinea’s for the private sector. X The high level of vertical economic growth, with the sector integration in mining GVCs means that currently accounting for 90% of X Preliminary findings for the the large mining companies possess exported goods and one fifth of tax mining industry are as follows: their own refineries and smelters revenues. However, IsDB’s analysis – Value chains are focused all over the world. This means that concludes that the mining sector is on aluminium, aluminium parts of the value chain shift to the still far from reaching its true potential. compounds (corundum) and cheapest areas of production. gold. Other significant minerals X The recommended measures include massive iron ore reserves for both sectors should enable POTENTIAL IMPACTS as well as significant resources of the country to access gains from cement, salt, diamonds, graphite, X The Government of Guinea has market-oriented agriculture and limestone, manganese, nickel and identified key areas for action that mining practices. uranium are aligned with the bottlenecks – The mining sector, which specified by the IsDB GVC team. The contributed to 80% of the complete GVC analysis for Guinea MINING country’s economic growth will further address the identified in 2017, has immense gaps and constraints at a more Bauxite accounts for transformative potential if granular level to ensure: harnessed appropriately. The two – The development of agriculture 90% of exports and main products identified in this value chains with a view to sector are: encouraging value addition, contributes 20% of Bauxite — Guinea has the diversifying Guinea’s economy world's largest bauxite reserves, and reducing reliance on food Guinea’s tax revenues estimated at 7.4 billion tons imports and representing 30% of global – Structural transformation of the reserves. Bauxite is a key source economy through investment Potential gold reserves are of export revenue, accounting for in infrastructure (energy and 90% of exports and contributing transport) estimated at 20% of the country’s tax revenues – Participation of Guineans in Gold — Guinea’s gold reserves skilled jobs in the mining sector are predominantly found in the through skills development 700,000 tons northeast of the country. The programmes
[ 239 ] SDGs
Niger — A post-COVID-19 restart strategy
sDB is developing a new MCPS for Niger, based on IGVC analysis
driven by increased public and private PURPOSE Each step in the investments. X With a population of 22.4 million people GVC represents and a gross national income per capita opportunities for X The dominant industries are: that is among the three lowest in the world, – Agriculture and livestock — accounting Niger faces many challenges in its efforts job creation, wealth for 40% of GDP and engaging about to achieve its development objectives. generation and 80% of the workforce but with low Reflecting the country’s high reliance on productivity levels, resulting in primary products and several episodes of empowerment for productions well below the potential political instability, growth has remained – Extractive industries — playing a key subdued and highly volatile for several the next generation role in the economy, with uranium and decades. of MSMEs in Niger crude oil accounting for 25% and 22% respectively of goods exports in 2018. X Since 2012, however, a solid growth momentum has emerged, supported by X The main strategic objective of the favourable rainfall and a relatively stable country’s national development plan is political context, despite heightened to achieve accelerated, inclusive and security challenges. Growth is expected to sustainable growth for income generation, accelerate above 6% in the medium term, job creation and consolidating the foundations of sustainable development.
X IsDB’s GVC approach of focusing on the GVC of products in which the country has a comparative advantage is well aligned with the government’s strategic development goals.
X The preliminary GVC analysis conducted by IsDB highlighted significant potential within the following sectors: – Mining and minerals (uranium, gold) – Food and beverages (sugar, pasta, palm oil) – Agriculture (cotton, rice, sugar, live animals) – Textiles (cotton, woven fabric, leather). – The GVC analysis conducted by IsDB was presented and discussed with the Government of the Republic of the Niger, with representation from various sectoral ministries.
X Based on the analysis and subsequent discussions, the agribusiness sector and the textiles sector were selected as the primary champion industries for Niger.
[ 240 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
X IsDB is committed to working closely with the Republic of the Niger to collaborate on interventions related to: – Infrastructure development – Access to finance – Strengthening institutional and value chain actor capacity.
INVESTMENT X The agribusiness and textiles (machinery and fertilisers), poor sectors hold significant promise for METHOD linkages between actors in the value value-added benefits as well as job X IsDB’s GVC analysis methodology chain, and significant infrastructure creation. (see page 170) was used to identify gaps. the key action points for Niger. X In the textiles and apparel sector, X Niger has an international for example, IsDB will use a GVC-based X Agribusiness has immense reputation for high-value hides with approach to identify opportunities for transformative potential for a prized Nigerian goat breed, chèvre value creation along each step of the Niger. The livestock sector alone rousse de Maradi, considered to chain for, among others: contributes 13% to the national GDP be of exceptional quality. There is – Cotton production and provides 22% of the country’s a minimal level of local processing, – Spinning to dyeing export earnings. The country has with most of the hides exported – Print and design significant asset levels, with 10 as wet-blue to Nigeria (80%), with – The retail fashion industry. million cattle, 24 million small a small quantity going to India, ruminants, and 1.5 million camels. Bangladesh and Italy. EXPORTS X The primary market for the X Key constraints to the leather country’s agribusiness exports sector are: The primary market for is Nigeria, which receives more – Lack of quality control than 95% of Niger’s total exported – Reliance on traditional tanning Niger’s agribusiness exports is livestock products. This amounts – Seasonal variation of livestock to US$ 190 million in trade annually, availability which makes it difficult Nigeria, which receives more a figure that is understated due to for tanneries to operate informal export channels. – Lack of marketing and branding than 95% of the total and therefore of investment and X Other critical products include sourcing opportunities. exported livestock products, rice and cotton, which rely on irrigated, labour-intensive, year-round amounting to ACHIEVEMENTS production along the Niger River Valley. Niger has 2 cotton ginneries X The GVC-based MCPS aims to US$ 190 million with a capacity of 60,000 tons/year identify and help mitigate the critical and 2 textile factories that produce bottlenecks to the transformative in trade annually textiles for domestic use. potential of the country’s agribusiness and textiles sector. X Niger has significant potential to Uranium and crude oil expand the scale of irrigated farming. X By harnessing public investments Only 1% of surface runoff and 15% of and mobilising private resources, respectively accounted for renewable groundwater are currently the MCPS will help to strengthen the used and less than 30% of potentially competitiveness of the identified 25% and 22% of irrigable land is currently irrigated. industries through interventions that will create jobs, increase FDI and Niger’s goods export in 2018 X The sector performance contribute to the country’s industrial is hampered by lack of inputs development.
[ 241 ] SDGs
Senegal — A post-COVID-19 restart strategy
he promotion of GVCs in Senegal will allow markets to mobilise resources T for development
X To help Senegal improve its PURPOSE Based on analysis participation in GVCs, IsDB’s quantitative X With a young and growing population of the structure and methodology has identified five important (currently 16 million but expected to long-term outlook of manufacturing industries for the country: expand to over 21 million by 2030), Senegal – Chemicals benefits from political stability and a the five industries – Agri-food industries diversified economy. identified by IsDB – Wood industries – Apparel industries X As the continent’s most western city and following – Petroleum industries. with access to the Atlantic Ocean, Senegal’s discussions with capital, Dakar, has become an African hub X Based on existing resources in Senegal, for the provision of products and services the Government the structure and long-term outlook to the rest of francophone Africa. of Senegal, the of these five industries and following discussions with the Government of X IsDB’s analysis, in cooperation with the petrochemicals and Senegal, IsDB has selected petrochemicals Government of Senegal, of the country’s agri-food sectors and agri-food as the main champion participation in GVCs indicates that industries for the country. labour force might require assistance were selected as with its capacity and competencies, champion industries METHOD which are crucial for the development of transformative industries. for Senegal X IsDB’s GVC analysis methodology (see page 170) was used to identify the key action points for Senegal.
X To identify and subsequently develop the sectors with the most potential that Senegal needs to focus on to achieve its high value-add increase and job creation targets, IsDB deployed its GVC methodology, which uses a filtering tool to identify champion sectors and products.
X GVC analysis identifies bottlenecks, capacity gaps and product potential across the value chain from the initial phase of production up to export and distribution. The interventions derived from this process will seek to address the gaps and bottlenecks in the GVCs of Senegal’s leading products/industries.
X The MCPS will look to expand and upgrade the Senegalese industries that the analysis has selected for their potential as champion industries.
[ 242 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
– Although Senegal is not a POTENTIAL IMPACTS historical petrochemical player, X The main preliminary its existing refining capacity can recommendations of the agri-food allow it to upgrade its position GVC analysis includes the following: by helping local firms formulate – To further grow the agri-foods base chemicals and ammonia, industry in Senegal, there needs especially considering the future to be an increase in productivity natural gas production in the and scale of agricultural output country – The country should further – Senegal can look at the African X Special attention will be paid to integrate its processing value market to increase demand from the formulation of fertilisers and chain to capture larger shares of end-industries (mainly fertiliser detergents for petrochemicals, and the market value and detergent) to stimulate agriculture food products such as – Productivity and scale should demand for petrochemical rice, malt extract, groundnuts, fruits be increased by supporting formulation in the country. This is and vegetables and fishing products smallholder farmers to form aligned with the new AfCFTA. for agri-foods. cooperatives, as these will enable them to achieve economies of INVESTMENT X The country will be encouraged to scale through knowledge and pursue more inclusive development technology transfer and gain X Overall, the preliminary GVC goals such as the creation of high- better access to financing for analysis completed by IsDB in quality jobs and the promotion of agricultural equipment Senegal concluded that: sustainable export competitiveness. – The Government can support the – Productivity should be increased establishment of cooperatives through the introduction of X IsDB used a RCA index to by providing platforms as well new machinery and further determine the products in which as guidelines and educational mechanisation and automation Senegal has a comparative advantage. support – Additional investments are – The effects of climate change in needed, through loans as well as X The PCI was used to gauge the Senegal are expected to severely foreign direct investments export potential of manufactured harm the agri-foods industry – Investment should be evaluated products. due to extreme weather such in terms of its environmental as drought, as well as increased impacts to make sure it is not X Manufacture of agri-foods, temperatures. Therefore, doing more harm than good petroleum, basic chemicals and mitigation measures must be – Senegal needs to improve its related products industries were implemented to prevent these transport infrastructure and compared with the average growth adverse effects. services to speed up export of world demand for all products and processes and facilitate cross- the average growth of Senegalese X The findings of a preliminary border trade. exports over the same period. The study on the petrochemical industry same analysis was completed for all reveal that: five champion industries. – The petrochemical industry is a GROWING POPULATION capital and asset-intensive one, X The value-add of the overall requiring economies of scale Senegal has a young and exports was broken down across to justify the huge investments all industries, then divided into required, especially upstream growing population of the domestic value-add, foreign activities of base-chemical value-add and indirect value-add formulation contributions of each industry. – The same oil and gas lead 16 million firms or their subsidiaries are but expected to expand to over X The highest value-add was usually responsible for the first recorded for agri-foods, dwarfing the few activities (upstream) of value-add of the other industries. The the petrochemical GVC, with 21 million domestic value-add was particularly upstream integration into base by 2030 high, which suggests very low GVC chemical production and plastics participation and position. manufacturing
[ 243 ] SDGs
Nigeria — A post-COVID-19 restart strategy
sDB’s global value chain-based analysis for Nigeria has identified significant opportunities I in five different industries
PURPOSE The preliminary METHOD X IsDB conducts GVC-based analysis of value chain X IsDB’s GVC analysis methodology (see the economic conditions in selected MCs analysis revealed page 170) was used to identify the key to determine their competitiveness in their action points for Nigeria. major industries. that promoting vertical integration X Further examination of the data X IsDB’s analysis, in coordination with the gathered during the GVC-based analysis Government of Nigeria, revealed five key and incentivising identified the following trends for the champion industries: selected industries in Nigeria: – Food and agribusiness foreign processors – The food and agribusiness industry is – Apparel will help address performing poorly in a sector that is – Petroleum growing worldwide, which suggests that – Automotive the weak linkage it is an industry with great potential and – Transport equipment. between producers untapped opportunities – The apparel industry is doing X Of these, three industries were and processors in comparatively well in a declining sector determined to have a high natural potential: Nigerian agriculture – Petroleum products do not have much – The petroleum industry (manufacture of dynamic potential and are situated in petroleum products) declining sectors – The rubber industry (manufacture of – Although the rubber industry overall rubber products) does not show dynamic potential, a – The apparel industry (manufacture of specific rubber product which makes footwear, leather and related products). many automotive components has dynamic potential to improve its performance in growing industries.
X The rise in the application of rubber products in various end markets has triggered growth for the industrial rubber products market. The rubber moulded component industry is expected to grow by 6.38% CAGR due to demand for fuel-efficient vehicles. Therefore, the potential in rubber products gives a great competitive edge for the development of the automotive industry.
X There has been a decline in gross exports in the agriculture, food and beverage industry. However, key trends in exports and value-add composition reveal opportunities in both local and international markets.
X The apparel industry’s share of exports is decreasing, which signals potential loss of competitiveness. However, the gross
[ 244 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
output for the industry is growing – Providing funding for significantly, suggesting that the mechanisation and the means to local market is thriving. While the replace cocoa trees, which are local content has increased over the vulnerable to pests and disease years, there has been no change in as they age the indirect value-add, indicating – Developing and implementing the potential to expand into new training programmes to help territories. smallholders gain certification – Improving value addition by X Petroleum, chemical and non- promoting bean-to-bar branding metallic mineral products follow strategies the same patterns as the apparel – Introducing agritourism (based industry, with strong potential for the X Other challenges include: on the value chain experience) as local market. Products from all these – Skill gaps a second source of income for industries can be used to build a – Cost of finance farmers thriving automotive industry. – Segmentation of the industry into – Enhancing farmer cooperatives a large number of small farmers – Using extension service – Weak processing capacity – Partnering with lead firms to POTENTIAL IMPACTS – Unstable energy supply leverage access to the sector. X A preliminary case study, based – Lack of storage facilities on the information gathered via the – Lack of skilled labour. X Suggested financial measures GVC methodology, indicates the include: prospects for future development of X IsDB’s readiness assessment – Improving access to finance for the cocoa industry in Nigeria. The of the agricultural sector in Nigeria the processing stage main points are as follows: found the following key factors to be – Introducing trade financing of greatest importance for the future mechanisms and other financing X The cocoa industry is one of the development of the sector: modes for processors key drivers of Nigeria’s agriculture, – Access to finance – Reinstating the Export Expansion contributing 30% of agricultural – Sector competitiveness Grant scheme or a similar products. – Sector capabilities. incentive structure to encourage origin grinding. X The industry employs 300,000 X IsDB’s recommendations include: farmers directly and 2 million people – GVC integration to help improve indirectly. Although Nigeria is the the country’s low competitiveness 4th largest producer of cocoa in and poor productivity the world, the country’s current – Innovation and workforce NIGERIA’S AGRICULTURE participation in world exports in qualification this commodity is limited mainly to – Action to address lack of adequate The cocoa industry is one of cocoa beans. training and technology adoption. the key drivers of Nigeria’s X The overwhelming majority of INVESTMENT cocoa exports are unprocessed. The agriculture, contributing country receives 30% lower cocoa X IsDB’s recommendations for the prices than competing exporters cocoa industry include investment 30% of agricultural because of lower quality beans. In in improvements across the value general, the cocoa industry faces chain, starting from inputs and products and employing two challenges: extending to sales and distribution. – Farm-level constraints These include: 300,000 farmers – Process-level constraints. – Having the correct inputs delivered to farmers, especially directly and 2 million X At the farm level, the system of access to quality seed sourcing quality inputs for farmers – Disseminating farming best people indirectly is limited. Poor road access, lack of practices using farmer field post-harvest infrastructure and lack school methodologies or of irrigation are critical issues. extension services
[ 245 ] Asia
[ 246 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
[ 247 ] SDGs
Indonesia — A post-COVID-19 restart strategy
nalysis based on IsDB’s GVC selection methodology has identified the agri-food, mining A and automotive sectors as champion industries for Indonesia, with potential to improve the country’s competitiveness
X Of these, the GVC analysis narrowed PURPOSE Indonesia has the list down to agri-food, mining and X IsDB has conducted preliminary GVC significant potential automotive as the most important analysis of Indonesia’s major industries, to expand into EV champion industries for the country going taking into account issues that could help forward. These are also industries that the country to compete more effectively in battery production, the Government of Indonesia is actively global value chains. thanks to its critical promoting and supporting with major industrial policies. X Analysis based on IsDB’s GVC selection raw material methodology initially identified five key METHOD industries for Indonesia: deposits – Agri-food X IsDB's GVC analysis methodology (see – Textiles and clothing page 170) was used to identify the key – Food action points for Indonesia. – Mining – Automotive. X The GVC analysis of Indonesia’s key industries has highlighted many opportunities for economic growth: – The agri-food industry is indispensable for Indonesia’s economy, contributing nearly 13% of GDP and employing 30% of the workforce. Over the years, with its vast arable and fertile land, Indonesia has built a comparative advantage in a variety of crops such as palm oil, rubber, coffee, tea, cassava, spices, coconut and fisheries – Currently, Indonesia is the world’s first producer of durian and fourth producer of avocado, with untapped exports in these products – Due to the growing international demand for fresh fruits and vegetables, connecting smallholder farmers to the international market can offer excellent opportunities for poverty reduction as it increases the income of farmers and generates employment. In addition, farmers should be helped to meet the growing international demand for fresh fruits – There is significant growth potential for one of the country’s main mining products, nickel, which is a key input for products in the automotive industry.
[ 248 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
INVESTMENT X Future investment will be needed to address the challenges facing Indonesia’s main industries. The preliminary GVC analysis reveals the need to build resilient and agile value chains by: – Creating efficient storage infrastructure to generate a more resilient value chain and allow for perishable commodities such as fruit, vegetables, eggs, dairy products and fish to be preserved for a longer period in order to mitigate the effects of supply chain shocks – Implementing redistribution infrastructure as a mitigation tool against food insecurity, with continuous monitoring of supply, distribution and storage built into X Targets for Indonesia include: healthy and hold on to their farms the food system, and investment – The achievement of locally longer, as 80% of farmers in in digital solutions produced high quality raw Indonesia are aged 45 and above – Initiating further in-depth GVC materials for the automotive – The agriculture industry suffers analysis to confirm and identify industry from constraints in access to the appropriate interventions – Strengthened local production of finance, which limits opportunities needed to address bottlenecks key automotive components for farmers to increase their and capacity gaps in all selected – Regional leadership in EV income and leaves them industries. production vulnerable to natural disasters – Establishment of a regional and volatile commodity prices automotive export hub. – A deeper GVC analysis will help to THE AGRI-FOOD INDUSTRY identify the required interventions to address all these bottlenecks. ACHIEVEMENTS The agri-food industry is X Preliminary recommendations X Findings in the mining and indispensable for Indonesia’s of IsDB analysis in the agricultural automotive sectors are as follows: sector include the following: – Although Indonesia has economy, contributing – Improved access to finance is a introduced EV policies, it crucial factor for the future of the should develop an EV battery nearly 13% of GDP and sector policy, starting by gaining an – Access to quality seeds will understanding of the global employing 30% of the help Indonesian producers to electric battery value chain enter high-value markets, while – To ensure cost and value-add workforce better understanding of modern competitiveness, Indonesia needs cultivation and post-harvest to secure a battery manufacturing techniques will allow for the facility, although domestic production of high-quality, high- targeted volume and access to 80% of farmers in yield products raw material could be challenging – Infrastructure is crucial to – As demand for EVs booms, Indonesia are aged increased competitiveness. In Indonesia should leverage its addition to roads, rail and ports, nickel and copper resources to 45 and above medical facilities are needed to expand into processing, thus allow older farmers to remain increasing value addition.
[ 249 ] THE WAY FORWARD
[ 250 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
Conclusion As IsDB moves into a future marked by greater uncertainty than has been seen in many years, we are confident that our new business model is fit for the tasks that lie ahead . The P5P is proving its worth, capitalising on IsDB's long-term strategy and extensive experience in delivering funding and financing to the world's poorest communities . The projects and initiatives outlined in this publication demonstrate both the resilience of our MCs and the importance of the work we are doing as a multilateral development bank in challenging times for global development .
As the world emerges from the Covid-19 crisis, we are ready to help our MCs to recover economically . In all these endeavours, it is essential to work together . Our project successes to date show that we can achieve great things by coming alongside our partners to deliver the support they need . We do this through a unified country platform, in line with G20 principles, to ensure long-term coherence and coordination among key stakeholders .
We believe that the Covid-19 storm will pass but the choices we make today will change our lives for decades . We are determined to help our MCs seize the existing opportunities to lift themselves out of poverty and strengthen their economies . In all of this, we will continue our path of making markets work for development — and doing development differently, in ways that work for all .
[ 251 ] SDGs
Doing business differently
sDB’s new business model is achieving significant results in making markets work for I development, with a range of impactful initiatives planned between 2021 and 2023 . This concept of making markets work for development necessitated engaging with MCs via a different modality and required a shift in the approach of how the MCPS was prepared . Hence, the MCPS 2 0. was designed to reflect this new approach, which was different from the classical way of developing the MCPS, that was based on standalone projects .
The MCPS documents for Gabon and Maldives have been completed, whereas five new MCPSs were initiated in 2020 and thirteen MCPSs will be initiated in 2021 . With the objective of ensuring IsDB’s pro-active responsiveness to the growing macro-economic challenges of MCs, a fast-track MCPS completion process is in progress that will ensure timely completion of these documents . The yearly breakdown of the GVC-based MCPS is shared below:
Shaping new frontiers for development Many MCs have u 2022 — Albania, Algeria, Côte d’Ivoire, Iraq, GVC-based MCPS 3-Year Plans: expressed interest Kazakhstan, Mauritania, Mozambique, u 2019 in implementing Pakistan, Tajikistan, Togo, UAE . — Gabon, Maldives, Morocco, Turkey . IsDB’s new business u 2023 u 2020 model and the next — Cameroon, Djibouti, Jordan, Oman, — Guinea, Indonesia, Niger, Nigeria, Turkmenistan . Senegal . three years will see significant progress u 2021 Creating impact the smart way — Afghanistan, Azerbaijan, Bangladesh, in this regard Guyana, Saudi Arabia, Kuwait, Some of the projects that are a part of the Kyrgyzstan, Malaysia, Sierra Leone, 2021 work programme are as follows: Suriname, Uganda, Yemen, Palestine . u Cotonou storm water drainage project, Benin: The objectives are to reduce floods causing damage to shoreline dwellers and infrastructure and to reduce stagnant water in the city of Cotonou .
u Construction of regional integration roads project, Sierra Leone: The proposed roads are links of national and regional importance between Sierra Leone, Guinea, and Liberia .
u Strengthening primary healthcare, Chad: The project aims to reduce the mortality and morbidity rates of the most vulnerable groups, especially women and children .
[ 252 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
u LLF — decentralised rural electrification through mini solar power plants, Togo: The project focuses on the villages furthest from the grid, overlooked by the various electrification programmes where the most vulnerable sector of the population lives . u Zero slums project, Djibouti: Upgrading slum neighbourhoods and improving the living conditions of the population . u Enhancement of the bread- wheat reserves in the Governorates of Al-Diwaniah and Maysan, Iraq: The development objective of the project is to increase the volume of the strategic reserve of bread wheat in Diwaniah and Maysan . u Reconstruction of Hawija Technical Institute, Iraq: The development objective is to support the Government’s post-conflict reconstruction efforts in the most badly damaged regions . Specifically, the project will re-establish access to, and improve the quality of the Hawija Technical Institute . — Communicating the real impact u Operationalisation of of IsDB's projects by profiling Environmental and Social the people who benefit from Safeguards (ESS) Policy: The ESS Building an agile organisation them, improving digital footprint Policy which was approved in and increasing international 2020 is being mainstreamed and Initiatives include: media coverage operationalised in IsDB’s projects . u Roll out of Country Programme — Developing a database of The approval of this policy has Delivery Unit: The plan includes content, films, images and positioned IsDB at a respectable completing the establishment publications and building a position among its peers as it was of the Programme Delivery Unit, robust communications team at the only major MDB that did not initiated by Senegal . IsDB will IsDB have an ESSP in place . This policy provide capacity development for — Arranging international Sukuk has improved IsDB’s stature from the new Monitoring and Evaluation conferences, redesigning IsDB’s a Corporate Social Responsibility Unit under the Governor Office new website, adopting a new (CSR) perspective, which is (Ministry of Economic Planning) in logo, participating in the WEF perceived in a positive way by the terms of embedding the delivery and various other initiatives rating agencies and international approach in monitoring project that have helped placing IsDB donor institutions . design, implementation and output in a stronger position on the evaluation . global stage . u IsDB Risk Appetite Statement: IsDB has developed its own Risk u Communications and external u Enterprise Risk Management: Appetite Statement . relations: The objective is to The ERM Programme is being enhance IsDB’s profile on the global implemented and its completion u Workload assessment: This stage through flagship events and will strengthen internal risk exercise is in progress and its initiatives . This includes: management aspects . outcome will ensure alignment
[ 253 ] between IsDB’s new business model and The fundamental Division will also forge new partnerships the skillset required . This will make IsDB with the aim of mobilising technical and more efficient and leaner . The workload principle is to financial resources for the benefit of assessment (WLA) exercise will prepare create tailored, MCs . the IsDB of tomorrow with a clear understanding of the resources that are comprehensive u Supplier and contract management needed to implement the new business solutions that tackle tool: The objective is to improve IsDB’s model . The WLA will also complement IMDT contracts, vendors management the workforce planning aspect that will the root causes, not and monitoring with better visibility and ensure that the relevant human capital is controls . IMDT is currently relying on developed with the right skillset needed . just the symptoms, semi-manual practices . in response to u Activity-based budgeting: With the u Developing national ecosystems objective of improving efficiencies development needs for SSTrC: The RL team will continue across the processes and understanding raised by the promoting the IsDB concept of National all IsDB-managed fund’s recharging of Ecosystems for South-SSTrC in MCs administrative expenses, a dedicated beneficiaries and at the global level by leading the methodology has been developed and development of new publications and the recharge process was implemented tools as well as implementing activities in 2020 . Building on this experience, in MCs . the activity-based budgeting will be developed . u Enterprise architecture (EA): A major programme from IMDT is to establish an u Strengthening global partnership and EA practice to ensure standardisation expanding the network of developers: and consistency . The RL Division will continue to position IsDB as a global actor of South-South u Integrated Results Framework (IRF): Cooperation . In addition to enhancing In February 2021, IsDB initiated the its existing partnerships with technical development of an Integrated Results cooperation agencies, private sector, Framework (IRF) for IsDB Group . This network of developers and non-MCs, the exercise aims to develop an Integrated Results Framework to measure the development effectiveness of IsDB Group operations over the period 2021-2030, in an integrated manner . The IRF will pay particular attention towards establishing an alignment of the results framework with the P5P, the new business model and the SDGs . Though benchmarking with other MDBs and other development institutions will also be carried out, the ethos and uniqueness of IsDB’s own strategic priorities will be at the heart of the IRF .
u Digitisation: IsDB launched the digitisation initiative in 2019, designed to improve the internal communication, working practices, content management, documentation storage and knowledge sharing . This has led to a change in the way these aspects are managed in IsDB, resulting in improved efficiency and transparency and more effective communication .
[ 254 ] THE ROAD TO THE SDGs | PROGRESS AND ACHIEVEMENTS
u COSO Framework: IsDB has obtained COSO certification, which is one of the leading frameworks used to assess the controls of an organisation . An implementation plan is in place to ensure improved controls and governance .
u Project Data Governance Framework: A Project Data Governance Framework has been developed with the aim of improving data-related aspects of the project management . It will ensure adherence to international standards of data accuracy, data reliability and data integrity .
u Objective Key Results (OKR): As the successful implementation of the P5P entailed cascading the KPIs from the President's level to the staff level to ensure that the strategic priorities are well embedded in IsDB's planning processes, the effective monitoring and reporting on these KPIs was equally important . Hence, a dedicated tool, OKR, was launched, gathering more than 200 objectives and KPIs . All staff members can now use this application to report their progress . u Performance dashboards: IsDB has developed a Project Portfolio Dashboard for the Board of Executive Directors (BED), with the aim to provide project level live access to BED members . This dashboard is instrumental in improving transparency, visibility and awareness about projects' performance . Besides, the P5P Dashboard, the Work Programme Dashboard, the Budget Utilization Dashboard, the MCPS Dashboard and various other dashboards have been developed to ensure greater monitoring and promote reporting culture within IsDB .
[ 255 ] CONTACT US Email: [email protected] Web: strategy.isdb.org