The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), the insurance arm of the Islamic Development Bank (IsDB) Group, today signed an important Memorandum of Understanding (MoU) with the Africa Finance Corporation (AFC) whereby the two parties agree to co-operate “in promoting joint action in the origination, financing and execution of Climate Action projects through ICIEC’s credit and investment insurance support in African Member States common to both.”

The MoU was signed by Mr. Oussama Kaissi, Chief Executive Officer of ICIEC, and Mallam Samaila D. Zubairu, the President and Chief Executive Officer of the AFC, in Sharm El Sheikh during the occasion of the COP27 gathering. ICIEC, of course, is a signatory to the Principles for Responsible Insurance and the only Shariah-compliant multilateral insurer in the world. The AFC is the leading multilateral infrastructure development finance institution in Africa.

Sustainable investment, climate action, adaptation and finance, and Green Finance are firmly embedded in the due diligence process of both institutions through linking all new business and other queries with SDG and climate action indicators. ICIEC and peer multilaterals have an important role in contributing to the international climate finance ecosystem. It is committed to further boosting its green and sustainable finance operations.

Promoting climate action through capacity development, resilient financing, and policy support in climate adaptation infrastructure and through the provision of risk mitigation and credit enhancement covers the mandates of both ICIEC and AFC. Another mandate of ICIEC is to promote trade and FDI flows, in this case to its 23 African Member States, in partnership with peer and specialised institutions.

The MoU recognizes that co-operation between AFC and ICIEC would bring about better co-ordination and more efficient implementation of their respective activities to the benefit of Climate Action projects, including renewable energy production in ICIEC member states, including in Africa region.

In this respect, the two institutions under the 3-year MoU will exchange information on their respective renewable energy project pipelines on a regular basis, with a view to explore origination, financing, insuring and delivery of such projects focusing especially on the renewable energy sector. The AFC has a proactive relationship with the IsDB Group and has even raised infrastructure funding through the issuance of a Sukuk.

Mr Oussama Kaissi, Chief Executive Officer of ICIEC, strongly welcomed the signing of the MoU with AFC: “This MoU further enhances ICIEC’s evolving playbook on Climate action and risk mitigation whether it relates to financing, underwriting, credit enhancement, and risk management. It is also yet another example of South-South Cooperation and the recognition that Africa has to come up with African financing solutions to finance African needs. Islamic project finance and investment, and de-risking solutions, are ideal for long-term infrastructure projects given their connectivity to financing the real economy especially through risk-sharing Private Public Partnerships. We look forward to building on this important relationship with AFC in this key area of Climate Action infrastructure.”