Towards the Perpetual Sustainable Sukuk Through Islamic Blended Finance: Lesson From Green Sukuk and Blue Sukuk in Indonesia

Abstract

Indonesia became the world's first country to issue Sovereign Green Sukuk to address climate change mitigation and adaptation. Another variant of Green Sukuk, although it still has not been issued, the Government of Indonesia has also prepared the framework of Blue Sukuk. The issue that arises is that sukuk generally has a redemption. In fact, the forerunner of the modern sukuk and the origin of sukuk itself, namely esham, does not have redemption. By using literature studies on the performance of Green and Blue Sukuk in Indonesia, also supported by focus group discussion with the related ministry and in-depth interviewing the expert, this chapter focuses on discussing: (1) The performance of Indonesia's Green Sukuk in the anthropogenic era; (2) The conception of Blue Sukuk to address climate change and at once to finance the blue economy; (3) The potential instruments of Islamic blended finance scheme and future direction for the Perpetual Sustainable Sukuk, a sustainable sukuk without redemption, to Islamic sustainable finance and Islamic fiscal sustainability.