I for Impact: Blending Islamic Finance and Impact Investing for the Global Goals

The 2030 Agenda for Sustainable Development offers a masterplan to create a better world for the people and the planet. It’s scale and ambition, however, requires new development partnerships supported by adequate financial and technical resources. As a response, development practitioners started to explore alternative and complementary innovative instruments to finance the SDGs -one of which is the prospects for increased cooperation and coordination between Islamic finance and impact investing.

To date, however, the academic and development literature has lacked a systematic exploration of this promising collaboration between Islamic finance and impact investing. This present study attempts to fill this gap by developing the first knowledge product to increase awareness on this collaboration.

I for Impact attempts to raise awareness on the compatibility between Islamic finance and impact investing. It reviews recent developments and key factors for growth, pinpoints similarities between the two sectors, and makes policy recommendations for development actors to create the conditions for the two sectors to benefit from each other.

The report is structured as follows:

› Chapters 1 and 2 provide the background to and outline the universe of impact investing;

› Chapters 3 and 4 provide the background to and outline the universe of Islamic finance;

› Chapters 5 and 6 identify and devise a strategy to enhance the areas of overlap between the two.

In Chapters 5 and 6, recommendations are made for development professionals to consider promoting and growing the area of convergence to create dialogue around Islamic finance and impact investing through the Global Islamic Finance and Impact Investing Platform (GIFIIP) – a multistakeholder platform established by the Islamic Development Bank (IDB) and United Nations Development Programme’s Istanbul International Center for Private Sector and Development (IICPSD) for blending Islamic financing and private sector resources in achieving the SDGs.

Pre-Feasibility Study for Green Sukuk Issuance in the Republic of Uzbekistan

As part of its joint initiative with the Capital Market Development Agency and the Islamic Development Bank, UNDP is providing support to the Government of Uzbekistan on enhancing the enabling environment for the introduction of Islamic finance and green sukuk in Uzbekistan to mobilize additional funding for the achievement of the SDGs and national development priorities in Uzbekistan.

The “Pre-Feasibility Study for Green Sukuk Issuance in the Republic of Uzbekistan” developed in collaboration with the UNDP Istanbul International Center for Private Sector in Development (IICPSD) aims to explore the opportunities and challenges as well as to perform a pre-feasibility analysis for the introduction of green sukuk in Uzbekistan. Considering the existence of a financing gap for the achievement of the SDGs in Uzbekistan, the study demonstrates that green sukuk could be a viable financial instrument to support sustainable development in the country and a promising potential tool for Uzbekistan’s efforts to address climate change and make the transition to a green economy.