FASILITAS DAN PROSEDUR PEMBIAYAAN OLEH

ISLAMIC DEVELOPMENT BANK (IDB)

Diskusi internal

Badan Kebijakan Fiskal

Selasa, 1 Juni 2010

Oleh:

Nanang Zainal Arifin

Pusat Kebijakan Kerja Sama Internasional

I. IDB Highlight

Establishment

Membership

Headquarter and Regional Offices

Shareholders

IDB Vision and Mission 1440H (2020)

Structure Organisation

II. Facilities (Products and Services)

Priority sector

IDB Window

Modes of Financing

III. Procedures

IV. IDB’s Operation in Indonesia

IV. Future Action

Ministry of Finance is IDB Governor Office and BKF is the Secretariat of IDB Office.

Government expects IDB to increase financing for private sector.

IDB facilities can be utilized optimally.

Islamic Finance Industry will evolve in the future.

• Establishment

• Purpose

• Membership

• Capital

• Head Office and Regional Offices

• Accounting Unit

• Languange

• Established in 1975 to foster socio-economic development

in member countries and Muslim communities in

compliance with Shari’ah.

• Authorized capital of US$ 45 billion

• Subscribed capital of US$ 22 billion

• Paid-up capital of US$ 5.3 billion

rating by Moody’s Investors Service, Fitch Ratings,

Standard & Poors.

• Zero-Risk Rating by the European Parliament

Islamic Development Bank (IDB)

• 22 countries in 1975 → 56 countries in 2009

• A Unique Model of South-South Cooperation

Africa: 27

Asia: 26

Europe: 2

Latin America: 1

• 56 members spreading over 4 continents

IDB Regional Offices

In addition, there are currently 12 Field

Representatives in some countries

Regional

Offices

Almaty

Kazakhstan

Kuala

Lumpur,

Malaysia

Dakar, Sene

gal

Rabat, Moro

cco

Saudi Arabia, 24.44

Libya, 9.81

Iran, 8.58

Qatar, 8.61Egypt, 8.48

Turkey, 7.73

UAE, 6.94

Kuwait, 6.54

Algeria, 3.05

Pakistan, 3.05

Indonesia, 2.7 Others, 10.07

Net Cum. End 2009 = US$ 63.90 billion

Projects, $ 28.14

bn, (44%)

Technical Assistance, $ 0.29 bn, (1%)

Trade, $ 34.78 bn, (54%)

Special Assistance, $ 0.7 bn, (1%)

“ By the Year 1440H (2020) IDB shall have become a world-class development bank, inspired by Islamic principles, that has helped significantly transform the landscape of comprehensive human development in the Muslim world and helped restore its dignity.”

Source: AHDR

“We are committed to alleviating poverty,

promoting human development, science &

technology, and Islamic banking & finance,

and enhancing cooperation among our

member countries, in collaboration with

development partners”

IDB

President

BOARD OF

GOVERNORS

BOARD OF EXECUTIVE

DIRECTORS

IDB Organizational Structure

VP

(Fin.)Chief

Econ.

VP

(Opr.)

VP

(Corp

Serv.)

Group Internal Audit

Group Strategic Planning

Group Risk Management

World WaqfFoundation

Group Integrity Officer

General Council

Group Ombudsman

Group Operations Evaluation

Group Shari’ah Board

Human Development

Agriculture Development and Food Security

Infrastructure Development

Intra-trade Among Member Countries

Private Sector Development

Research and Development in Islamic Economics, Banking and Finance

IDB: Six Priority Areas

IDB Group

Islamic Development Bank (IDB)

Islamic Research & Training

Institute (IRTI)

International Islamic Trade

Financing Corporation

(ITFC)

Islamic Corporation

for the Development of the Private

Sector (ICD)

Islamic Corporation for

Insurance of Investment & Export Credit

(ICIEC)

• Research Seminars & Conferences

• Training Courses

• Publications

• IDB Prize in Islamic Economics, Banking &

Finance

• IRTI Scholarship for PhD in Islamic Banking

Islamic Research & Training Institute

(IRTI)

• Established in 1994 to provide Shari’ah-compatible

export credit insurance, political risk

insurance, technical assistance.

o Capital Structure (66.7% IDB, 33.3% MCs) : Total

authorized capital US$ 231 million, subscribed

capital US$ 228 million

o Business Insured in 2009 : over US$ 1 billion

o Cumulatively, as of December 2009 :

- Business Insured US$ 6.35 billion

- in more than 37 member countries

• Insurance Financial Strength Rating of Aa3 by

Moody’s Investors Service

Islamic Corporation for Insurance of

Investment & Export Credit (ICIEC)

o Established in 1999 & commenced its operation in July 2000

o Mandated to promote private sector development and to offer

advisory services to the private sector entities in member

countries.

o An authorized capital of US$ 2 billion, paid up capital of US$

470 million.

o 47 Islamic Countries are members of which 21 are in Africa.

o Capital Structure (50% IDB, 30% MCs, 20% Financial

Institutions).

o As of December 2009, cumulative business :

- Approvals : 185 Projects amounting to US$ 1.59 billion

- in more than 32 member countries

Islamic Corporation for the Development

of the Private Sector (ICD)

• Commenced business activities in January 2008.

It promotes and enhances intra-trade and trade

cooperation among 57 member countries of the

Organization of Islamic Conference (OIC) through

trade financing and promotion programs;

• Authorized Capital : US$ 3.0 billion

• Subscribed Capital : US$ 750 million

• Managing Funds for other institutions : US$ 1.0 billion

• Year 2009 Trade Finance Approvals : US$ 2.1 billion

• Cumulatively Trade Financing, end 2009 : US$ 4.6 billion

International Islamic Trade Financing

Corporation (ITFC)

The Islamic Development Bank Group: Current Areas of Intervention

Financing of

Projects (Public

and Private)

Developing the

Islamic Financial

Industry

Trade Financing

and Promotion

of Cooperation

Capacity Building

Agriculture

Infrastructure

Industry

Education

Health

SMEs, micro

financing

Other sectors

Equity

participation in

Islamic financial

institutions

Developing

Regulatory

framework

Research and

training

Financing

imports

Financing

exports

Promoting

trade

cooperation

Disseminating of

skills (exchange of

experts, training, etc.)

Supporting civil

societies through

NGOs

Supporting women-

in-development

initiatives

IDB/ICD IDB/ICD ITFC IDB/IRTI21

The Islamic Development Bank Group:Current Areas of Intervention (Cont’d)

Risk

Insurance

Research and

Training

Asset

Management

Special Assistance

and Scholarships

Country risk

Short- and

medium-term

commercial

risks

Coverage of

banks for Islamic

financing

products

Islamic

banking and

finance

Islamic

economics

Training in

related fields

Awqaf assets

Investment

portfolios

Equity funds

Venture capital

funds

Support to Muslim

minorities in non-MCs

Alleviation of natural

disasters

Scholarships for

Muslim communities

in non-MCs.

Merit Scholarship

Programs

ICIEC IRTI IDB/ICD IDB22

Leasing

Installment Sale

Construction Finance (Istisna’a)

Equity

Line of Financing

Technical Assistance (Loan & Grant)

Murabaha (Trade Financing)

• Medium/long term rental financing arrangements for income

generating projects in industry.

• Capital equipment and other fixed assets: machinery, agro-

industrial, transport, etc.

• Public and private sectors.

• Technically sound and have a life span beyond the lease period.

• Lease period up to 15 years, including gestation period up to 4 years.

• Mark up 6% per annum and rebate 15% per annum.

• Minimum limit is ID 2 million and maximum is 80 per project.

• Transfer of ownership of the equipment after the end of the lease

period.

•

Medium-term mode of financing.

IDB buys tangible assets on behalf of the beneficiary and sells it at a mark up allowing the beneficiary to make the payment.

Transfers the ownership upon delivery to the beneficiary.

Private sector must contribute 20-30% of the total project cost.

Minimum limit of financing is ID 2.0 million and the upper limit is about ID 80 million per project.

Eligible goods is equipment needed for development in various economic sectors: infrastructure, industry, agriculture, education, etc.

Maximum period is 15 years including the gestation period.

Mark-up is fixed at 6% per annum and a 15% rebate on the mark-up.

Provide bank guarantee acceptable to IDB.

Istisna’a is a contract whereby a party undertakes to produce a specific thing according to certain agreed-upon specifications at a determined price and a specified date of delivery.

The work can be done by others (not undertaking party) under his control and responsibility.

The objective is to promote manufacturing and construction capabilities in the IDB member countries.

It provides medium/long-term financing to meet financing requirement for manufacturing/supplying of assets such as machinery, cargo vessel, oil tankers, etc.

The financing of capital goods shall not exceed 15 years including a gestation perios.

The mark-up shall be fix 6% per annum on the Islamic Dinar. The mark-up is subject to change by the Bank from time to time.

The beneficiary (buyer) shall provide a guarantee to IDB from the Government or a first class bank.

Long-term financing for development projects.

Priority sector is agriculture and infrastructure.

Maximum loan is ID 15 million per project.

Repayment period 15 to 25 years, with a grace period of 3 to 7 years.

The beneficiary is to contribute in the project financing (co-financing).

Usually for government or public institutions and having government guarantees. Private sector may also benefit from loans in special case.

Disbursements are based upon actual project execution.

TA is the provision of technical expertise to assist in the preparation or implementation of a project or a policy. It can also help in the development of institutions or human resources.

2 types of TA: directly related to a project (feasibility study, detailed design, etc), and an advisory nature (definition of policies, preparation of sectoral plans, institution-building, research, etc).

TA as part of a project is financed through the project itself, while independent TA is financed by a grant or interest-free loan.

For public sector is limited to maximum of ID 300,000, and for private sector is ID 100,000.

IDB participates in the equity capital of companies/enterprises that are potentially profitable, Shariah compatible, and are projected to have a developmental impact on the economies of member countries.

Goal is to strengthen the capital base and to augment investors’ confidence in the company.

It can be used to finance all types of campanies both in public and private sectors.

Maximum participation is one-third of the equity capital.

IDB will nominate one or more directors to the governing body of a company.

I. Public projects

II. Private projects

Technical departments submit a project financing proposal to Bappenas.

Bappenas will list the proposed project to the Blue Book.

Bappenas will facilitate to find donors/lenders for the project.

IDB will send an appraisal team to study the proposed project.

IDB and the technical departments will sign the loan agreement.

Any request for financing should be channeled through the Governor of the concerned member country to IDB.

The official request must be accompanied by a feasibility study of the project (proposal).

The Private sector must contribute 20-30% of the total project cost.

The private sector must provide a guarantee from a first class commercial bank acceptable to IDB.

The IDB Governor will issue no objection letter (NOL) on the proposed project.

An request letter from project owner.

A letter of support from expert commision.

Bank guarantee

The completeness of documents:

Work plan

Funding requirement

Cash flow plan

The financial statements of the last three years, etc.

• Indonesia is Founding Member of IDB (1974)

• Member of ICIEC (1993)

• Member of ICD (2003)

• Member of ITFC (2007)

Brief History

Entity Membership Subscription %

IDB 1974 ID 406.48 2.54%

ICIEC 1993 ID 0.25 0.17%

ICD 2003 US$ 4.75 1.11%

ITFC 2007 US$ 2.06 0.31%

Pledge Contribution

ISFD US$ 0.00 US$ 0.00

Portfolio Summary

IDB: 86 Ops for ID 753.5 mn (US$1.1 bn)

Completed57 Ops = ID381.4 mn (45%)

Active 27 Ops = ID345.4 mn (40%) of which17 Ops = ID226.7 mn disbursing (66%)

10 Ops = ID 188.8 mn non-disbursing (34%)

SAO: 2 Ops ID 2.1mn = (US$2.1 mn)

ICD : US$ 23.8 mn

ITFC : US$ 785.2 mn

ICIEC : US$ 68.7 mn (Business Insured)

STRATEGY ALIGNMENT

Country Development Strategy (RPJMN 2010-14)

IDB Proposed Strategy

Increase Per capita Income

Reduce Poverty & Population Growth

Increase Health & Nutrition

Improve Human Capital and

competitiveness

Balanced Growth:Accelerate growth

outside Java (Regional Balance) AgricultureIrrigation

Rural Development

Education

Health

Urban Development

INFRASTRUCTURE

Transport

Energy

Cross-cuttingThemes:

(1) Poverty Reduction (2) Islamic Finance (3) Capacity Building

Operations approved during 1430

1430H Work Program

Operations Mode US$ million

1. Belawan Commercial Port Istisnaa 87.000

2. PNPM-Integrated Community Driven Development

Istisnaa 68.000

3. PNPM-Integrated Community Driven Development

Loan 15.000

4. Medical Research Centers and Two University Hospitals

IS/Lsg 70.000

5. Enhancement Carbon Sequestration From Indonesian Rain Forest

TA Gr 0.200

6. West Sumatra Emergency Relief Grant 1.000

7. West Sumatra Relief & Rehabilitation Loan/Istisnaa 29.500

Grand Total 280.200

Work Program-1431H

Project Type Sector Amount (US$)

Quality Improvement of Padjadjran University (UNPAD), Bandung

HDE -Education

35.00

Semulue Physical Infrastructure (TP-Phase II)

Agriculture & Rural Development

20.0

Sub-Total 55.00

Category A: Ready projects

Work Program-1431H

Category B: Standby projects

Development & upgrading of State University (UNESS), Semarang

HD -Education 35.00

Procurement of Rail Track, Java INF - Transport 70.00

Regional Roads Development (co financing with ADB)

INF-Transport 120.00

RR of Vocational Training Centers (BPLK)

HD - Vocational Education

36.00

Integrated Community Driven Development (ICDD)

Rural Development

77.60

Sub-Total 338.60

Total (A+B) 393.6

41

NO IDB PORTFOLIO IN INDONESIA (per December 31, 2009)

Description AMOUNT

1 IDB Total Projects 79 Loans

2 Total Amount USD 1.767,3 Million

3 Cancellation 10 loans

4 Total Amount of Cancellation USD 312,6 Million

5 Net Commitment 69 loans

6 Total Net Commitment USD 1.454,8 Million

7 Total Disbursed USD 1.119,9 Million

8 Undisbursed USD 364,6 Million

9 Principal Paid USD 805 Million

10 Outstanding USD 314,9 Million

*) Based on 4th Quarterly Report Year 2009, Directorate of Evaluation, Accounting and Settlement

IDB FINANCING

Total Operations Plan in 2010: US$ 3.72

billion

- US$ 39 million Grants Financing

- US$ 381 million Concessional Loans

- US$ 3.30 billion Ordinary Financing

Investments in Islamic Banks & Financial Institutions

Capacity Building for Islamic Banks

Introduction and Dissemination of Islamic Modes of

Financing, and Developing Knowledge

Developing the architectural foundation of the Islamic

financial Industry, by establishing and supporting crucial

institutions *

44

List of cost of Borrowing

Descriptions

Multilateral Bilateral

IBRD IFAD IDB ADB -ADF ADB - OCR JICA (ODA)

1/7/09

Maturity 15-24,5

years

40 years 15-20 years 32 years 15-25 years 30-40 years

Grace Period 3-9 years 10 years 3-5 years 8 years 3-5 years 10 years

Repayment Period 15 years 30 years 12-15 years 24 years 12-20 years 20-40 years

Commitment Charges - - - - 0,15% -

Front-end-fee 0,25% - - - - -

Service Charges - 2,5 - 5,1% - - -

Interest Rates LIBOR +

1.20%(FSL)

LIBOR -

0.05% (VSL)

0,75-3% - 1% during

Grace Period,

1,5% after

words

LIBOR+0,60%

Waiver 0,40%

-

TERMS AND CONDITIONS

Thank you