Partnerships for the goals
The SDGs are a collection of 17 interlinked global goals designed as a blueprint to achieve a better and more sustainable future for all. The SDGs were established in 2015 by the United Nations General Assembly with the intention to be achieved by the year 2030. In September 2019, it was stated at the United Nations General Assembly that 2020 would be the beginning of the Decade of Action for the Sustainable Development Goals (SDGs). Little did the world know that a global pandemic was about to cause severe disruptions to the global economy.
Before COVID-19, the road to achieving the SDGs was already an uphill battle, with the annual financing gap estimated at USD 2.5 trillion in developing countries[1]. The pandemic has exasperated this gap even further, the OECD estimates an additional increase of USD 1.7 trillion[2]. These consequences have highlighted the need to align global finance mechanisms and incentives with the SDGs to get the world back on track to achieve the 2030 Agenda. It has become imperative that public and private sector actors optimize their efforts towards more sustainable initiatives.
Since their adoption, the financing of SDGs has primarily been done through the public sector, relying heavily on international public financial sources, such as Development Finance Institutions (DFIs), including Multilateral Development Banks (MDBs), National Development Banks (NDBs), Regional Development Banks (RDBs) and further supported by Export Credit Agencies (ECAs), Multilateral Insurance Institutions such as ICIEC. Separately, each institution can contribute significantly to global sustainable development, but by working together, these DFI can catalyze finance for development projects worth billions of dollars throughout the world.
Although DFI and public sources of funding are instrumental to financing SDGs, they can’t fill the overwhelmingly large SDG financing gap alone. Collaborations between the public and private sectors are also critical for catalyzing efforts to achieve the SDGs. So much so that the call for collaborative efforts has been inherently built into agenda 2030 via SDG17: partnerships for the goals. The intention of this goal is to strengthen the means of implementation and revitalize the global partnership for sustainable development.
ICIEC’s partnership landscape
The SDGs are influential signposts for ICIEC’s continuing development journey as they play an important role in shaping the Corporation’s strategy and development outcomes. ICIEC has always considered collaboration as an important catalyst for its strategy and operations, marking SDG17 as one of the six SDGs where ICIEC’s development role is most relevant. The Corporation has long pursued partnerships with banks, investors, corporates, and national ECAs, among others, both within and beyond its 48 member countries.
When working jointly with ECAs, banks, and the reinsurance market, ICIEC’s insurance solutions can be bolstered to reduce the risk for larger and more impactful sustainable development projects. For example, through partnerships with banks, ICIEC plays a key role in mitigating risk to mobilizing private sector resources to develop medical infrastructure in its Member Countries. When working with ECAs, ICIEC’s reinsurance solutions offer risk-sharing support that enhances their capacity to insure sustainable development projects. Together, the Corporation and its partners increase the reach and depth of their service offerings, encouraging critical financing for meaningful projects that would otherwise be deemed too risky.
Additionally, ICIEC is a specialized institution inherently established by the Islamic Development Bank (IsDB) to be a partner in the IsDB Group. Other members of the Group include the International Islamic Trade Finance Corporation (ITFC), The Islamic Development Bank Institute (IsDBI), the Islamic Corporation for the Development of the Private Sector (ICD) and the World WAQF Foundation (WWF). All IsDB Group member institutions work together towards the same goal – delivering economic prosperity across the OIC by supporting sustainable development through Shari’ah-compliant solutions. Synergies between ICIEC and the IsDB Group strategically allow the entities to deliver on both their shared and individual goals more effectively.
ICIEC’s SDG synergy: Turning Partnerships into Action
Partnerships are integrated into almost all of ICIEC’s activities, and the SDGs are always an underlying consideration in the projects that the Corporation chooses to undertake. By underwriting investments in strategic sectors and projects in coordination with governments, banks, and ECAs, ICIEC supports the development agendas of its member countries.
For example, ICIEC provided USD 20 million in credit enhancement cover to its partner, BMCE Bank of Africa, to rehabilitate a centre for disabled individuals in Cameroon. The rehabilitation project facilitated the modernization of the centre’s technical facilities, the renewal of essential equipment, and the extension of healthcare facilities to accommodate a broader range of disabilities. The rehabilitation also supported expanding the centre’s services, focusing on socio-professional reintegration and empowering people with disabilities to participate in various socio-economic activities. The project contributes to the government of Cameroon’s policy to fight against social exclusion and meet the demands of the sub-region. The project is also contributing to the achievement of multiple SDGs, including SDG 3: good health and well-being, SDG 8: decent jobs and economic growth, and SDG 10: reduced inequality. The project’s impact reaches beyond Cameroon as the centre provides needed medical services to patients from Chad, Central African Republic, Gabon, Congo, and Equatorial Guinea.
In response to the global coronavirus pandemic and OIC countries facing economic, humanitarian, health, political, and environmental crises, ICIEC tightened its efforts to collaborate, working closely with its partners – both within the Islamic Development Bank Group (IsDB Group) and beyond — to develop and implement innovative and effective solutions to offset the negative short-, medium-, and long-term impacts of the pandemic. Fortunately, most of these efforts also easily align with the achievement of the SDGs.
From the immediate onset of the pandemic, all partners in the IsDB Group unified to take broad and decisive action to protect OIC citizens, committing a total of more than USD 2.4 billion of aid to Member Countries and to Muslim communities in non-Member Countries. In the short-term, ICIEC provided USD 770 million as part of IsDB’s ‘Strategic Preparedness and Response Program’ to ensure the continuous flow of strategic imports, protect investments, and minimize economic volatility. Later, the two entities established a collaborative USD 2 billion credit guarantee facility known as the COVID-19 Guarantee Facility (CGF) to continue their support throughout medium and long-term recovery.
ICIEC also worked particularly closely with the Islamic Solidarity Fund for Development (ISFD) during the crisis. The ISFD sits within the IsDB and works to reduce poverty (SDG1: no poverty), build productive capacities of Member Countries (SDG8: decent work and economic growth), reduce illiteracy (SDG4: quality education), and eradicate diseases and epidemics (SDG3: good health and well-being). ICIEC has formed a bespoke partnership with ISFD known as the ICIEC-ISFD COVID-19 Emergency Response Initiative (ICERI), in which a funding grant of USD 400 million is being used to subsidize insurance premium, facilitating the procurement of medicine, medical equipment, food supplies, and other essential commodities to eligible member countries.
More recently, ICIEC’s ability to bolster support for the SDGs through a partnership with associations was highlighted when the Corporation signed a Memorandum of Understanding (MoU) with the Islamic Organisation for Food Security (IOFS) and a Strategic Partnership Agreement (SPA) with the Islamic Food Processing Association (IFPA), focused on achieving SDG 2: zero hunger. The entities will collaborate using their respective strengths in providing insurance in support of trade and investment towards promoting food security, sustainable agriculture, and rural development. The agreements between the institutions provide a general framework for collaboration, including attracting and promoting investment in agribusiness and food security; promoting best practices in food safety and Halal products to boost intra-OIC food trade in the private sector; promoting South-South Cooperation; and boosting the involvement of SMEs in agri-food business.
Partnerships continue to be a priority for ICIEC and the Corporation seeks to enhance synergies with all of its partners wherever possible towards the faster and more effective achievement of our mutual goals.
[1] https://www.oecd-ilibrary.org/sites/6ea613f4-en/index.html?itemId=/content/component/6ea613f4-en
[2] https://www.oecd-ilibrary.org/sites/6ea613f4-en/index.html?itemId=/content/component/6ea613f4-en
