The Sudanese bank, Sanabel, a subsidiary of the Bank of Khartoum recently launched the African country’s first green sukuk. The $11.3 million (4.75 billion Sudanese pounds) investment fund will finance renewable energy projects for commercial use. According to the Accounting and Auditing Organization for Islamic Financial Institution (AAOIFI), sukuk are securities of equal denomination representing individual ownership interests in a portfolio of eligible existing or future assets. They are essentially, bond-like instruments compliant with Islamic banking principles.
The said fund will finance the production of 55 MWh of energy per day to be used by industries such as agriculture and mining. The investment fund has been launched in partnership with Nahda Company for Sustainable Development and the Arab-African Company.
Sudan split with its oil-rich counterpart, South Sudan, in 2011 leading to a marked reduction in its oil producing capacity. The country is, thus, looking to diversify its existing energy mix by incorporating more renewables in its grid. Its proximity to the Blue Nile has helped in the development of significant hydro power in the country.
Even then, a large part of the country’s population still does not have access to electricity and power cuts are frequent leading to a migration towards solar power. Sudan has a very high potential to develop large solar plants, due to a high radiation and ample land for implementing these projects, solar power uptake is mainly in the form of small distributed systems and microgrids.