The Indonesian government plays a pivotal role in the anticipated rise of global ESG sukuk issuance, projected to exceed USD 50 billion by 2025. This growth is driven by increasing investor demand, funding diversification goals, and sustainability initiatives within Muslim-majority countries. Favourable financing conditions, supported by expected rate cuts from the US Federal Reserve, further enhance the environment for sukuk issuance.
As sukuk becomes a key funding tool in emerging markets, the Indonesian government’s recent sovereign sukuk issuance exemplifies this trend, attracting significant international investment. However, challenges such as geopolitical risks and complexities in sharia compliance remain, necessitating continued governmental support to strengthen the ESG framework and drive sustainable development.
