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Regional Islamic Supranational Enterprises (RISE)


Regional Islamic Supranational Enterprises (RISE)

Regional Islamic Supranational Enterprises (RISE)



IsDB Strategy
Cognisant of IsDB’s financial sustainability imperatives and the capital investment needs to implement the Sustainable Development Goals, the Bank developed an innovative institutional mechanism that enables a more efficient use of its resources and a maximised developmental impact. This mechanism is centred around the establishment of Regional Islamic Supranational Enterprises (RISE). Instead of funding investments through Ordinary Capital Resources (OCR), RISE institutionalises an overarching integrated partnership framework where OCR acts as a resource mobilisation catalyst. This partnership model leverages the strengths of each developer to create significant synergies and deliver a combined impact that is considerably more important than the sum of each stakeholder’s capacity.

A RISE is a regional developer specialised in infrastructure project funding and implementation with a geographical coverage aligned with the regional hubs. Each RISE will adapt to its respective context, complementing rather than replacing existing national institutions. Together, RISEs constitute a closely knit network of specialised developers covering all IsDB Member Countries (MCs).

How does it Work?

Funding
RISE funds its activities by issuing securities on domestic and international capital markets. These securities are de-risked with a guarantee mechanism that attracts development partners with a national, regional and global mandate. The mechanism pools national development banks, National Infrastructure Guarantee Funds, and bilateral and multi-lateral official development assistance (ODA) resources, and allocates tailored residual risks to each stakeholder.

Origination
Grounded in the MC’s development strategy and IsDB’s Global Value Chain approach, the priority infrastructure investments are developed and brought to a bankability stage by RISE, IsDB and the MC

Implementation
RISE implements the originated projects by partnering with a private sector developer (PSD) in accordance with multilateral development bank procurement practices. RISE seeds the projects’ vehicles and the PSD mobilises the remaining funding independently.

Distribution
Post-construction projects are pooled with geographical and sectoral diversification and distributed to the capital markets. This frees up RISE’s balance sheet and cuts the capital cycle by a factor of four.

Governance
RISE’s governance structure balances sovereign and private sector interests. Direct involvement in project implementation is a contractual device that mitigates some of the most salient structural issues in public and public-private partnership procurement as it allows better alignment of incentives between all parties.