Doha Bank eyes $1bn sukuk

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Doha Bank plans to sell a $1 billion bond in September next year to finance investments in renewable energy, the chief executive officer said yesterday.

Islamic bonds, known as sukuk, comply with Islam's ban on lending on interest. Bondholders are instead paid returns derived from underlying assets, such as rent from real estate.

"We're looking to raise up to $1 billion through an Islamic bond in September next year for renewable energy," Doha Bank's Chief Executive Raghavan Seetharaman told Reuters on the sidelines of an Islamic conference in Qatar.

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The bank wanted the money for projects such as setting up an exchange for trading greenhouse gas emissions permits, Seetharaman said. He gave no further details.

The market for carbon credits in the Middle East is nascent, but worldwide is growing rapidly.

The global carbon credit market traded volumes of over $30 billion last year, up from less than $1 billion in 2004. The rapid expansion has caught the attention of a growing number of international investment banks.

The region has a large carbon footprint - Qatar emitted the highest greenhouse gas emissions per capita in 2003, according to a UN Development Programme report issued last year.