Agrarius Sustainability Engineered (Agrarius) listed Africa’s first Shari’ah-compliant sustainability-linked Sukuk (Sukuk) on the Johannesburg Stock Exchange (JSE).
Sukuk instruments are Shari’ah-compliant fixed-income debt instruments that generate periodic profit distributions comparable to corporate or governmental bonds.
What makes a Sukuk unique is that it represents an ownership interest in an asset, and the proceeds from the issue of Sukuk instruments can only be used for ethical purposes.
The listing of the Sukuk constitutes the inaugural issuance by Agrarius under its R10 billion Shari’ah-compliant sustainability-related asset-backed note programme.
It focuses on the agriculture sector, which was registered and approved by the JSE in September 2022.
The inaugural issuance, where Agrarius targeted to raise R500 million, was oversubscribed by investors.
The proceeds from the issuance will be invested in green and sustainable projects and transactions in the agriculture sector value chain.
Agrarius is the brainchild of and is administered by 27four Investment Managers, a majority women-owned and led South African firm.
The Agrarius Sukuk will mature on 28 October 2025 and is expected to start making periodic profit distributions to investors from 30 September 2023.
Shari’ah-compliant instruments forbid paying interest and instead reward investors through the sharing of profits.
The Sukuk has been listed on the Sustainability Segment, established by the JSE, to assist companies in raising debt for green, social, and sustainable investment projects.