National Development Financing

Through Sukuk Negara

Dwi Irianti Hadiningdyah Makassar Hajj Dormitory financed by Sukuk Negara

Director of Islamic Financing

Directorate General of Budget Financing and Risk Management
Ministry of Finance Republic of Indonesia

October 28, 2020

Notog tunnel Banyumas financed by Sukuk Negara

IAIN Salatiga building financed by Sukuk Negara

 Indonesia Islamic Finance
Landscape
Islamic Finance Market Share*
(in trillion Islamic banking Islamic NBFI Islamic CM
rupiah)
Islamic
9,68% Finance 1800
As of 31 July 2020

1600

1400

1200 60,15%

1000
*) excluding Sharia-
compliant stocks
800
6,73%
600
Conventional
90,32% Finance 400 33,12%

200

0
2017 2018 2019 Jul-20
As of July 2020, total assets of Indonesia Islamic finance (excluding
Sharia-compliant stock) have reached Rp1.639 trillion or USD111,86 Growth (yoy) 26,41% 14.15% 13.84% 10.65%
billion.
Source: OJK, 2020 Source: OJK, 2020 2
 SUKUK NEGARA OVERVIEW
IDR Trillion IDR Trillion
1,551.83
1600 350
321.38
1400 300
Issuance Method: Investor Type:
258.28
1200
Domestic Investor: 250
213.93
Auction a. Institution 1000
192.49
200
178.90
b. Individual 800
Global Investor By 119.51
150
600
Private Placement Regions:
100
a. Middle East (25%) 400 75.54
57.09 53.18
b. Europe (11%) 33.31 50
200 26.97
c. US (21%) 4.70
16.55
Bookbuilding d. Asia (Include 0 0
Indonesia) (44%) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 15 Oct 20

Sukuk Negara Type: Aqad Type: As of Oct 15, 2020, Sukuk Negara
1.Domestic Sukuk 1.Ijarah Sale and Lease Total issuance: IDR 1,551.83 trillion
a.PBS / SDHI / IFR / SPNS Back Outstanding: IDR942.08 trillion.
b.Retail Sukuk (SR dan ST) 2.Ijarah Al-Khadamat
2.Global Sukuk 3.Ijarah Asset to be Leased Denomination:
a.Regular Sukuk 4.Wakalah IDR and USD
b.Green Sukuk
3
 SUKUK NEGARA INNOVATION PROGRAM 2018 - 2020
Project Financing Sukuk
CWLS
▪ Sukuk are issued to finance government projects
▪ Supporting productive cash waqf. directly (earmarked)
▪ Project allocation 2013-2020: IDR118,26 trillion,
▪ Facilitating cash waqf
i.e. bridge, roads, university, lab, rail etc
▪ Distribution of CWLS coupon and ▪ E-monev for project monitoring
discount for social activities. Cash Waqf Project
▪ At maturity, the redemption will Linked Sukuk Financing
return 100% to the investor / (CWLS) Sukuk
waqif

Green Sukuk
▪ Green framework and green E-SBN
annual impact report
▪ 100% of the issuance proceeds Green Sukuk Online ▪ Retail Sukuk Sales through an
must be used for financing Retail Sukuk online mechanism.
eligible green projects ▪ Distribution partner: Bank,
▪ Three times issued in global Securities Company, Fintech
market (2018, 2019, 2020)
▪ Online green sukuk retail in
domestic market (2019) 4
ALLOCATION & DISTRIBUTION OF SUKUK NEGARA FOR PROJECT FINANCING

2,939 592 Projects

IDR41.4 T
576 Projects
IDR21.5 T
89 Projects
IDR39.5 T

PROJECTS Road & Bridge Water Resources Transportation

THROUGHOUT
DI SELURUH
INDONESIA
INDONESIA

475 Projects 1.176 Projects 14 Projects 15 Projects

IDR10.2 T IDR4.1 T IDR0.3 T IDR1.3 T
Education Religious National Park Laboratory (BSN, BLI, LIPI, LAPAN)

5
 Retail Sukuk Development
“Issuance of Retail Sukuk continues to increase and supports financial inclusion
policies in Indonesia.”
▪ Retail Sukuk issued Series Triliun

since 2009. 13 Retail Sukuk Total Investor IDR203,7 T

347.145 Total issuance
Retail Sukuk
▪ Support the Issued from
Investors 2009-2020
2009-2020
development of Islamic
Financial Markets and
6 Series Total Investor Triliun
financial inclusion Savings Sukuk
72.039 IDR16,71
▪ Encourage the Issued from Investors Total issuance
transformation of 2016 - 2019 2016-2019
society towards
investment-oriented
Investors come from various professions :
society.
▪ Investors can buy in 64% 8% 10% 10% 8%

small units of purchase. Entrepreneur Government Student and

Housewife Others
and Private Official
▪ ST002 is the 1st
retail Employees
Retired
(case study Retail Sukuk Retail SR-013)
sukuk that was issued
online in 2018
Individual investors come from
34 Provinces
 Green Sukuk Issuance
Green Sukuk is a shariah-compliant bond, where 100% of the proceeds exclusive go to finance or refinance green
projects that contribute to mitigating and adapting climate change, as well as the Sustainable Development Goals (SDGs)

International Market Domestic Market 2019

1st 2nd 3rd Green Retail Sukuk

2018 2019 2020 • Sukuk Tabungan ST006 (Online)
• Coupon 6,75% p.a (floating with floor)
- Yield 3.90% p.a - Yield 2.30% p.a • Tenor 2 years
- Yield 3.75% p.a
- Tenor 5.5-years - Tenor 5-years
- Tenor 5-years • Total IDR1,46 T
- USD750 million - USD750 million
- USD1.25 billion • Total investors 7.735
- Investor spread : 23% - Investor spread : 12%
- Investor spread : 18% USA, 22% Europe, 29% • Millennial investors 51,07%
USA, 15% Europe, USA, 11% Europe, 32%
Middle East, and 26% Asia Middle East, 5% Indonesia,
32% Middle East, and 35%
Asia and 40% Asia

GREEN SUKUK : June 23, 2020

3rd
1. The lowest global sukuk coupon for tenor 5 years
2. Oversubscribed 7,37x
3. Green Investor reached 33,74%
7
 The Aim of Cash Waqf Linked Sukuk

The development and Facilitating waqif to invest cash Supporting the development of the
innovation efforts in the field of waqf in a safe financial instrument Islamic financial market, especially
Islamic social finance and (Sukuk Negara) the cash waqf industry
investment in Indonesia

Encouraging the consolidation of Diversify investors and Sukuk Encouraging diversification of the
Islamic social funds to finance Negara instruments sharia banking business, through
various social projects and optimizing the role of LKS PWU
programs (not government
projects / programs through state
/ municipal budget)
8
 Retail CWLS Issuance Urgency
1. Support in strengthening fiscal capacity
a) Positioning CWLS as a potential Quasi-Sovereign instrument candidate → must be built and developed so that the
next 5 - 10 years can be realized.
b) The need for the sustainability of the CWLS program in the framework of establishing endowment funds from cash
waqf funds and other philanthropy to expand the base of domestic government securities investors.
2. Institutional strengthening of BWI, Nazir, and Islamic Financial Institution (LKSPWU)
a) Implementation of the Core Waqf Principles in which BWI must upgrade its institutional capacity with a role as an
authority (regulation, supervision and guidance) in the management of waqf.
b) Strengthening the strategic role of Islamic Financial Institution (LKS PWU) and Nazir in the process of collecting waqf
and implementing social programs / projects.
3. Support for achieving SDG targets
a) The financing of social infrastructure / social programs uses the proceeds from the cash waqf investment in Sukuk
Negara.
b) Increasing the participation of the community → social projects / programs are designed and implemented by the
community through the Nazir with the arrangement, supervision and guidance of BWI.
4. Take advantage of the momentum of the Covid-19 Pandemic
a) The growing development of both institutional and individual philanthropy.
b) A positive campaign for the development of social investment in Indonesia, where other countries have stopped due to
the Covid-19 pandemic situation.

9
 Retail CWLS SWR001

▪ The process of selling CWLS Retail is

Settlement
carried out through a Distribution Partner Offering Time Allotment Date
Date

(Midis). Launching

▪ 4 Midis Retail Sukuk, namely a Sharia Bank

which is also LKS PWU, has been 9 Oct 2020 12 Nov 2020
09.00 AM 10.00 AM
appointed as Midis CWLS Retail. 9 Oct
2020
16 Nov
2020
18 Nov
2020
▪ T&C:
Distribution Partner & Nazir:
▪ Structure: Wakala
▪ Fixed Coupon 5,5% p.a.
▪ Non-tradable
▪ Tenor 2 years
▪ YAYASAN HASANAH
▪ Minimum order: IDR1 million ▪ Yayasan Bangun ▪ Baitul Maal Muamalat ▪ Lembaga Amil Zakat TITIK
Sejahtera Mitra Umat ▪ Wakaf Salman ITB Infak dan Sedekah ▪ DOMPET DHUAFA
▪ Maximum order: unlimited (Yayasan BSM Umat) Nahdzatul Ulama
▪ Maturity Date: 10 Nov 2022 (LAZISNU)
▪ Lembaga Amil Zakat
Infak dan Sedekah
Muhammadiyah
(LAZISMU)
 Social Project of Retail CWLS

Social Impact Economy Impact

▪ Worship • Micro Small Medium Enterprise (SME)
▪ Increasing Islamic boarding operating income. • Education and training, provision of capital,
marketing and legality, as well as mentoring and
▪ Building construction facilities for skills, knowledge,
monitoring of 236 local MSMEs in Jabodetabek and
spiritual activities for women at the Khadijah Learning
East Java.
Center (KLC) with a need of @ IDR45 million/ month.
• Dhuafa assistance in the form of training, mentoring,
▪ Education
evaluation and business capital for 15 people.
▪ Undergraduate Scholarship (250 students in 20
• Construction of 10 houses with cheap rent @ IDR100
University).
million in Bogor.
▪ Scholarship for elementary/junior/senior high school
student (350 students in several regions).
• Agriculture
▪ Islamic boarding school scholarship (1000 students in
several regions). • Support for rice seed breeding in Lampung (40
tons/month).
▪ Scholarship for teachers (300 teachers in remote area)
• Providing hydroponic agricultural assistance for 10
▪ Save our school (aid) in 10 points area.
women / single parents who live in arid land areas,
▪ Health @IDR 5 million/month.
▪ Deaf therapy for Mustahik (1000 hearing aids for poor
children aged 1 month - 18 years in 8 regions).
• Farming
▪ Stunting Program: 87 points area in Jakarta, Indramayu,
• Providing quality cows in Trenggalek for 50 farmers.
Pandeglang, Cirebon, Garut dan Tasikmalaya.
▪ Increasing nutritional intake of school-age children.
▪ The funding for the treatment of 20 patients/month
with a total of IDR 6.25 million/month and the
procurement of personal protective.
Thank You
 Case Study: CWLS series SW-001

SW-001 Proceed utilization:

▪ Private placement by
Issue date: March 10, 2020 Indonesian Waqf Board Discount:
(BWI) Building renovation and medical
equipment procurement in Waqf
Nominal: IDR50,85 billion ▪ Raising fund in two Hospital
Equivalent USD3,5 million
years
Tradability: Non-tradable ▪ Majority investors are Coupon:
institutions - Free cataract surgery for
Aqad: Wakalah ▪ Participation from Dhuafa at Achmad Wardi
Individual waqif IDR149 Hospital (target of 2,513
patients for 5 years)
Yield: 6,15% million (0,29%).
- Ambulance procurement
Fixed coupon: 5% p.a

Maturity date: March 10, 2025

13
 Cash Waqf Linked Sukuk Scheme
6b. Refund of Waqf Funds 6a. Sukuk Redemption

6c.
Refund of NAZIR NAZIR
WAQIF Temporary PARTNER
Waqf Funds Islamic Financial
Temporary Cash Institution 2a. Contract (MoU)
BWI 3a. Sukuk Purchasing
Waqf 1a. Waqf Funds
(LKSPWU) (Management
MoF- RoI
and development
of waqf assets on 3b. Sukuk Issuance
Non- Islamic
Perpetual Cash Financial 2a. Waqf Fund a national &
Waqf 1b. Waqf Funds Institution Placement international
(Non - LKSPWU) scale)
4. Project
Financing

5b. Coupon Distribution in 5a. Coupon Payment

Role BI, Baznaz, and BWI accordance with the MoU

1. Maintain transparency and governance of waqf

and zakat funds via the implementation of Waqf WCP 5c. Coupons utilization for
Implementation social activities
Core Principles (WCP) and Zakat Core Principles
(ZCP);
2. Zakat and waqf information system providers; LAZ
3. Social institution partners (Nazir and LAZ) in ZCP Implementation
managing social projects (eg development of
Islamic boarding schools). Utilization of sukuk funds to
4. Government partners in monitoring the utilization finance government projects
of the sukuk waqf financing project. (public services)
5. Public education related to sukuk waqf
14
 Sukuk Negara vs Domestic Corporate Sukuk
IDR Trillion IDR Trillion
1,551.83
14,000 (billion IDR) 13,658
1600 350
321.38
13,000
1400 300 12,000
258.28 11,000 10,625
1200
250 10,000

1000 213.93 9,000

192.49
178.90 200 8,000
800 7,000 6,514
150 6,000 5,662
600 119.51
5,000
3,924
75.54 100 4,000
400 3,172
57.09 53.18 3,000 2,608
2,017 1,675 2,204
200 26.97 33.31 50 2,000
16.55 1,025 923
4.70 1,000 565 654 585
175 200 300 100
0 0 0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 15 Oct 20 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

4% 4%
Outstanding as of 15 October 2020: Total issuance as of 15 October 2020:
▪ Sukuk Negara: IDR942,08 trillion ▪ Sukuk Negara: IDR1,551.83 trillion
▪ Domestic Corporate Sukuk: IDR35,42 ▪ Domestic Corporate Sukuk: IDR56,72
trillion. trillion
96% 96%
15
Sukuk Negara Corporate Sukuk Sukuk Negara Corporate Sukuk