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Green Sukuk

Sukuk is derived from the word sakk, which can mean legal instrument, deed, and cheque. Sakk can also mean to strike a seal on a paper document. The first sukuk transaction took place in Damascus, Syria in the Great Mosque of Damascus (Umayyad Mosque) in the 7th Century AD. Syria is a treasure house of culture and history. Tawriq (from wariq) means to render something into cash.  Taskik (from Sakk) is also used as securitization though literally refers to the process of dividing the assets into papers (Sukuk). Tawriq is defined as: “transforming a deferred debt for the period between the establishment of the debt and the maturity period into papers, which can be traded in the secondary market” (in Majallah Majma ‘Al Fiqh’).
 

Green Sukuk are Shariah-compliant bonds related to climate change and Shari’ah compliant investments in renewable energy and other environmental assets.  Proceeds are used to finance construction, to refinance construction debt, or to finance the payment of a government-granted green subsidy. They may involve securitizing future income cash flows from ring-fenced projects or assets with specific criteria attached.