Newsletter Q3 2022 | Climate Resilience & Energy Security

November 2022

Message from the CEO

In this Autumn edition of the ICIEC newsletter, we take stock of how member states of the OIC are gearing themselves towards creating climate resilience. This has never been more vital than now, particularly in the wake of climate-related tragedies that have hit some of our member states, most notably Pakistan. We look ahead at the climate resilience agenda at COP27, which is taking place in Sharm El Sheikh, Egypt, in November, and at which ICIEC will be a major player.

Creating an environment of resilience is proving to be a watchword of 2022 – and energy and climate resilience will be at the heart. ICIEC’s endeavours to help shoulder some of the financial and credit risk, particularly for OIC member states with lower credit ratings, are highlighted in this edition of the newsletter. ICIEC’s role in helping countries de-risk and meet the funding gap for projects that will help secure energy and climate resilience is paramount.

In the runup to COP27, we focus on Egypt’s attempts to ensure energy security and climate resilience in a feature that looks in depth at the financing of energy infrastructure and renewables in the country.

Another area in which we provide insight is in the critical minerals space, and we feature a timely article on the topic. This is an increasingly important area, particularly for the continuing development of clean energy. ICIEC sees its role becoming more important in terms of supporting the financing of projects for the many countries that will rely on critical minerals for their energy transition.

As we continue to introduce you to valued members of the ICIEC family in our “ICIEC in Five” feature, I’d like to showcase the head of our Climate Change Taskforce. We look at the work he is doing from his base in Jeddah to coordinate ICIEC’s important climate change and resilience agenda.

I hope you enjoy this edition, and please do let us know if there are any other issues or features you would like us to focus on in future editions of the ICIEC newsletter.

Sincerely,

Oussama KAISSI

Chief Executive Officer, ICIEC

News & Events

On October 2, 2022, Jeddah, KSA. ICIEC has been honoured by an insurance industry award in the prestigious Global Brand Awards 2022. ICIEC is the inaugural winner in the category ‘Best Multilateral Insurance Corporation Brand – Global’ for Global Brand Awards 2022. The international insurance brand honours are given by the Global Brands Magazine and have been awarded to participants in the insurance industry sector since 2013.

Insights

Critical Minerals And Their Role In The Climate And Energy Transition

Egypt’s Energy: A COP27 Promise

Meet the team: ICIEC in Five

Project Highlights

ICIEC Supports Shariah-compliant financing for SMEs in Indonesia mining

In July, ICIEC supported SIDRA Capital Financing to extend tenor and increase the amount covered in Shariah-compliant financing for SMEs in Indonesia mining. This is for its loan to PT MCT (Asia Trading) in Indonesia. The $80 million one-year political risk insurance (PRI) cover to SIDRA Capital helps it secure its Shariah-compliant loan facility to PT MCT. In turn, PT MCT will use the financing to fund transactions involving suppliers and operators in the mining and nickel trading sectors.
Specifically, PT MCT will be able to use the facility to help SME mines to get access to finance which assists local mining companies in bridging the current financing gap. The facility also promotes Islamic financing routes in the country and is an important foreign direct investment and foreign exchange source for Indonesian companies, and is a good route towards economic integration between the OIC Member States.
ICIEC’s cover for SIDRA Capital’s political risk in the financing also aims to help underpin and support two UN Sustainable Development Goals (SDG 8 towards decent work and economic growth and SDG 12 towards responsible consumption and production).

ICIEC gives cover to ICBC Standard Bank for Capex investments in Uzbekistan

On 3 August 2022, ICIEC provided $75 million cover in support for Uzbekistan’s vital mining capital expenditures. The five-year deal provides cover to ICBC Standard Bank, UK, for non-payment risk in a syndicated financing facility for Navoi Mining and Metallurgical Company (NMMC), Uzbekistan. NNMC will use the funds for capital expenditure purposes.
NNMC is specifically involved in the production of precious metals. Gold is Uzbekistan’s major export, and the mining industry provides a major source of growth to the economy, which was impacted by the pandemic. The project aims to help with the government’s industrialisation and sustainable mining efforts. NMMC currently supports the economy as it contributes to increasing tax and dividends amounting to around 20% of GDP, helping to narrow the budget deficit.
ICIEC is providing a non-payment cover to ICBC Standard Bank using its Non-Honouring of Financial Obligations by a State-Owned Enterprise (NHFO-SOE) policy.
By the creation of direct and indirect jobs and modernisation of the mining equipment, the project is set to contribute mainly to two of the UN Sustainable Development Goals. These are SDG8 (improving sustained, inclusive economic growth and decent and productive employment), and SDG9 (improving industry, innovation, and infrastructure by building resilient infrastructure, fostering innovation, and promoting inclusive and sustainable industrialisation).

ICIEC supports member states through its Bank Master Policy- Conventional Financing Agreement (BMP-C)

ICIEC has provided multiple member states with $50 million in one-year support through its Bank Master Policy –Loan Facility Agreement (BMP). This support has been through the mobilization of ST trade credit facilities used by member states for their exporters and import of strategic goods such as fertiliser, petrochemicals, steel, and agricultural commodities etc.
Cover under the BMP was first offered in 2019 to FIM Bank, Malta and Incomlend, Singapore. The BMP is a single/multiple (portfolio) non-payment risk policy which serves as a credit enhancement instrument for commercial banks and financial institutions in non-member states. The product is designed to facilitate conventional trade finance loans and promote trade transactions that fall within the scope of ICIEC’s mandate, promotion of member country exports, bilateral trade, and procurement of strategic goods by member states.
This has proven to be an effective risk-mitigant instrument which benefits the member countries in meeting their trade financing requirements.

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