First green sukuk gets BSEC nod

Bangladesh's first green sukuk has got the nod from the Bangladesh Securities and Exchange Commission (BSEC) to raise Tk 3,000 crore in funds.

The stock market regulator yesterday approved a proposal of Beximco to issue the sukuk in a commission meeting on its premises chaired by Chairman Prof Shibli Rubayat Ul Islam.

Of the Tk 3,000 crore, Tk 2,250 crore will be raised through private placement and the rest through initial public offering (IPO).

Of the Tk 2,250 crore, Tk 750 crore will be raised from existing shareholders and Tk 1,500 crore from other investors.

The face value of the sukuk is Tk 100 and it would require a minimum subscription of Tk 5,000. Its minimum periodic distribution rate is 9 per cent.

The proceeds will be used to implement projects of Teesta Solar and Korotoa Solar, two subsidiaries of Beximco Power Company.

It will also be used to purchase new machinery required for the expansion of Beximco's textile division, it added.

Teesta Solar is a joint venture of Beximco Power and China's TBEA Xinjiang Sunoasis Company.

Under an agreement, the Bangladesh Power Development Board (BPDB) will purchase electricity from Teesta Solar for 20 years at $0.15 per kilowatt hour.

Korotoa Solar is a joint venture between Beximco Power and the Jiangsu Zhongtian Technology Company.

According to a 20-year agreement, the BPDB will buy electricity from Korotoa Solar's plant at $0.14 per kilowatt hour.

City Investments Capital Resources is the issue manager of the sukuk.

In December last year, the government issued Tk 8,000 crore sukuk for a safe water supply project.

There was a huge response to this initiative from Shariah-based banks, non-banking financial institutions and other eligible parties.

At yesterday's meeting, the BSEC also approved the IPO of Union Insurance Company to raise Tk 19.36 crore.

The insurer will use the IPO proceeds to keep deposits with banks, invest in the capital market and purchase floorspace.

The meeting also approved a draft of Shanta Fixed Income Fund, which primarily aims for Tk 10 crore.

Of the fund, Tk 1 crore would come from Shanta Asset Management and rest would be open for general investors.