|
1.
What is the Islamic Corporation for the Development of the Private
Sector (ICD)? How was it established? When did it start functioning?
2.
What are the main objectives of ICD?
3.
Which countries are entitled to become members of ICD?
How many have joined ICD?
4.
What is the capital structure of ICD?
5.
How much must a country subscribe to ICD�s share capital upon
joining the Corporation?
6.
What is the organizational Structure of ICD?
7.
Does ICD have the same Board of Directors as IDB?
8.
What are the products and services of ICD?
9.
What are the operating principles of ICD?
10.
What is Shari'a ?
11.
What are the types of projects eligible for financing by ICD?
12.
What are the criteria of eligibility for ICD financing?
13.
What is the unit of account and operation?
14.
What is the project information required for ICD financing?
15.
Does ICD contribute to the financing of micro-enterprises and
SMEs?
16.
Can ICD co-finance projects with non-Islamic financing institutions?
17.
What are the contact details of ICD?
1.
What is the Islamic Corporation for the Development of the Private
Sector (ICD)? How was it established? When did it start functioning?
The Islamic Corporation for the Development
of the Private Sector (ICD) is an affiliate of the Islamic Development
Bank (IsDB). It is an international multilateral financial institution
created for the development of its member countries through the
provision of financial services to the private sector. ICD was
established as per the resolution of the IsDB Board of Governors
during its 24th meeting held on 24-25 Rajab 1420H (2-3 November
1999) in Jeddah, Kingdom of Saudi Arabia. ICD started functioning
on the same day its Inaugural General Assembly Meeting was held,
i.e. 6 Rabi� II 1421H (8 July 2000).
------------------------------------------------
2.
What are the main objectives of ICD?
ICD focuses on the following objectives:
* Identifying opportunities in the private sector that could
function as engines of growth.
* Providing a wide range of Shari�a-compatible
financial products and services.
* Expanding access to Islamic capital markets by private
companies in IDB member countries.
* In achieving these objectives,
ICD seeks to play a role in: mobilizing funds for private sector
investment; acting as a catalyst in privatization programs and
restructuring of companies in member countries by providing advisory
services to both public and private sectors; encouraging the development
of Islamic capital markets.
------------------------------------------------
3. Which countries are
entitled to become members of ICD?
How many have joined ICD?
All member countries of IDB are entitled
to become members of ICD. As of 29 Safar 1423H (12 May 2002),
forty-five (45) countries had signed the Articles of Agreement
of ICD; out of these 45 countries, 33 had ratified the Articles
of Agreement and became member countries of ICD. Moreover, three
public institutions have also fulfilled the conditions of membership
and became members of ICD.
------------------------------------------------
4. What is the capital
structure of ICD?
The authorized capital of ICD is US$
1.0 billion of which US$ 500 million is subscribed capital. The
structure of the subscribed capital is as follows: IDB 50%; Member
Countries 30%; Financial Institutions of member countries 20%.
------------------------------------------------
5.
How much must a country subscribe to ICD�s share capital upon
joining the Corporation?
Upon joining ICD, a country agrees to
subscribe the number of shares that was allocated to it as per
the resolution of IsDB Board of Governors during its 24th meeting
held on 24-25 Rajab 1420H (2-3 November 1999) in Jeddah, Kingdom
of Saudi Arabia.
------------------------------------------------
6. What is the organizational
structure of ICD?
ICD has a General Assembly representing
its members (countries and institutions), a Board of Directors,
and an Executive Committee that consists of a selected number
of Board members and acts as a fast-track decision-making body.
ICD has also a Shari'a Committee that advises on Shari'a compliance
of ICD products and services, and an Advisory Board comprising
renowned personalities well versed with ICD's fields of activity.
The President of IsDB is the ex-officio Chairman of the ICD Board
of Directors. Appointed by the BOD,the General Manager of ICD
is the chief executive officer, conducting the current business
of the Corporation under the general supervision of the Chairman
of the Board of Directors.
------------------------------------------------
7. Does ICD have the
same Board of Directors as IDB?
No, despite the fact that IDB has 50%
shareholding in the capital of ICD, the two institutions have
different Boards of Directors.
------------------------------------------------
8.
What are the Products and services of ICD?
* ICD provides a wide variety of financial
products from which its clients can choose. This enables ICD to
offer a mix of financing that is tailored to meet the needs of
each project. ICD's direct financing is through the subscription
and purchase of shares or the provision of term financing in productive
and profitable projects or companies operating in member countries.
As a policy, ICD shall not be the single largest shareholder in
any project nor shall it acquire a majority or controlling interest
in the share capital of a project or enterprise except when it
is necessary to protect its interest.
* ICD also acts as a manager (Mudarib)
or sponsor for funds created by other institutional investors.
It can create venture capital or sector funds for financing of
projects or companies.
* ICD structures, arranges and manages
syndications, underwrites and manages share and securities issues,
makes private placements and also carries out securitizations
for its clients.
* ICD provides advisory services to governments,
public and private companies on economic, financial, institutional,
and legal aspects relating inter alia, to creating a suitable
environment for private sector development, project financing,
restructuring/rehabilitation of companies, privatization, securitization,
Islamic finance and development of Islamic capital markets.
------------------------------------------------
9. What are the operating
principles of ICD?
ICD operates along the following principles:
* Provide financing on terms and conditions which take into account
the requirements of the project/company to be financed, risks
of the project and the market terms and conditions of similar
financing.
* Seek representation on the Board of
the companies it finances or invests in without assuming responsibility
for managing any of these companies.
* Maintain reasonable diversification
of its investments.
------------------------------------------------
10. What is Shari'a
?
ICD utilizes Shari'a compatible modes
of financing/financial products, in particular, Equity, participating
in the share capital (Musharaka), profit sharing with declining
participation, or trustee profit sharing (Mudharaba).
Term Financing: leasing (Ijara), installment sale and istisna'a
(financing of a construction/manufacturer order).
Quasi-equity in the form of term financing convertible into equity
at some stage of the project life.
------------------------------------------------
11. What are the types
of projects eligible for financing by ICD?
* The projects eligible for financing
by ICD are mainly:
Greenfield
projects : This refers to investment/financing
of new companies/projects which will have a developmental impact
on the economy as a whole, and fulfill the criteria of technical
soundness and financial proficiency.
Expansion
projects : This refers to financing/investment
in plant expansion or capacity enhancement.
Existing
projects under restructuring / rehabilitation :As most countries are restructuring their
industries to reduce dependence on a particular sector,ICD will
have the opportunity to finance companies that are being restructured
or rehabilitated.
Privatization
operations: ICD will finance state-owned enterprises
which are being privatized as long as the remaining investment
by the government in the company does not exceed 49%. Moreover,
it will structure and finance projects implemented through concession
agreements (BOT, BOOT, BOO, etc.) and also finance the modernization
of privatized companies to enhance their productivity and competitiveness.
------------------------------------------------
12. What are the criteria
of eligibility for ICD financing?
All productive or service activities
that are legal, Shari'a compliant, financially profitable, economically
viable and contribute to the development of the member countries
are eligible for ICD financing as long as the public ownership
of the project does not exceed 49% of the share capital. Further,
all sectors are eligible with the exception of recreation and
defense.
------------------------------------------------
13.
What is the unit of account and operation?
ICD currency of account is the US dollar.
However, ICD will finance in the major convertible currencies.
------------------------------------------------
14. What is the project
information required for ICD financing?
When undertaking a preliminary evaluation
of the possibility of investment or financing of a project, ICD
requires information on the company such as project's objective,
details on company and sponsor, ownership structure, sector of
operation, project cost and financing requirements. Following
a first expression of interest in the request, the basic information
on the project has to be complemented by a market study or a feasibility
study and other elements of information that may be deemed necessary
to enable ICD make the final decision.
------------------------------------------------
15. Does ICD contribute
to the financing of micro-enterprises and SMEs?
ICD does not contribute to the financing
of micro-enterprises, as this activity is being carried out by
the Islamic Development Bank which also extends lines of financing
to National Development Financing Institutions (NDFIs) to finance
SMEs. ICD can however provide financing to SMEs through special
funds established on a regional or country basis in promising
sectors such as telecommunications, new technology,such as telecommunications
and new technology.
------------------------------------------------
16.
Can ICD co-finance projects with non-Islamic financing institutions?
ICD can co-finance projects with non-Islamic
financing institutions, including conventional banks, provided
that the financing to be extended by the Corporation itself is
Sharia�a compliant. Thus, two cases may arise in this respect.
One possibility is that ICD and the non-Islamic financing institutions
undertake parallel co-financing where the component financed by
ICD is separate from those financed by the other institutions
even though they relate to the same project. Another possibility
is that the other institutions are willing to apply the same Shari�a
- compliant mode of financing as ICD. In this case a joint co-financing
may be envisaged, and even a financing syndication.
------------------------------------------------
17.
What are the contact details of ICD?
Islamic Corporation for the Development
of the
Private Sector (ICD)
P.O. Box 54069 Jeddah 21514 Kingdom of
Saudi Arabia
Tel
: + ( 966 - 2 ) 644
- 1644
Tel : + ( 966 - 2 ) 636
- 1400
Fax
: + ( 966 - 2 ) 644
- 4427
Email:
[email protected]
Web Site : www.icd-idb.org
|
