Indonesia’s state-owned financial institution Permodalan Nasional Madani (PNM) announced that its third Orange Sukuk paper will be issued on 14th January 2026 – a deal underscoring the growing traction of gender- and inclusion-linked Islamic capital market instruments in Asia. Nessreen Tamano writes.

The Mudarabah-structured Sukuk, worth a total of IDR1.5 trillion (US$89.88 million), will be issued across three series with tenors of one, three and five years. The transaction follows PNM’s debut Orange Sukuk launched in July 2025 and its sophomore offering in September 2025, cementing Indonesia’s position as a key testing ground for this thematic Sukuk structure.

PNM’s repeated return to the market with an Orange Sukuk also reflects the broader ambitions of Impact Investment Exchange (IIX), the architect behind the Orange Capital framework, which seeks to embed gender equity, inclusion and climate resilience directly into capital market instruments.

Impact and Islamic finance

IIX is extending its decade-long work in gender-lens and social impact investing into the Islamic capital markets through its Orange Sukuk initiative – a Shariah-compliant instrument designed to channel capital toward inclusive and climate-resilient development sectors. Debashis Roy, Director for Advisory and Partnerships at IIX, walked IFN through the organization’s journey so far.

“The origin story is that we asked: how can we make the tools of capital markets work for gender, climate and inclusion, not just as add-ons or corporate social responsibility, but as foundational drivers of return and risk?”

“The Orange label emerged as a branding and thematic identity for this purpose: Orange for inclusion, gender, climate resilience, equality,” said Debashis.

The Orange Sukuk forms part of IIX’s broader Orange Capital framework, which adapts its gender-lens investing model to Shariah-compliant structures to enable participation from Islamic investors.

However, translating this ambition into practice has not been straightforward. Among the challenges were designing Sukuk structures flexible enough to incorporate gender and climate metrics while meeting Shariah and regulatory requirements, and building investor confidence that impact-linked instruments can deliver both measurable outcomes and financial discipline.

The Bangladesh model

Bangladesh has emerged as a parallel focal point for IIX’s Orange Sukuk initiative. There, the group is working with private sector partners, including investment bank BRAC EPL Investments and consumer goods conglomerate PRAN-RFL Group, as well as public sector stakeholders, to develop an Orange Bond and Orange Sukuk ecosystem, with a targeted US$1 billion pipeline.

“The Bangladesh initiative exemplifies what happens when public and private sector players align around a bold vision,” Debashis told IFN.

“The model shows that when you combine policy will, thematic clarity (gender/climate/inclusion), Shariah compliance, strong partnerships and a credible pipeline, you can create a repeatable framework.”

A key milestone came in October 2025, when Bangladesh’s securities regulator released draft amendments to formally recognize Orange bonds alongside gender and sustainability bonds, creating a clearer regulatory pathway for Orange Sukuk issuance in the country.

For IIX, Bangladesh is less about a single transaction and more about proving that a thematic Sukuk market can be institutionalized when regulation, issuer readiness and investor appetite converge.

Measurement and engagement

Central to the Orange Sukuk proposition is the measurement and disclosure of gender and impact indicators. Under the IIX framework, issuers commit to specific outcomes – including women’s employment, women-led enterprise growth, and climate adaptation – and report against them annually.

“Shariah boards recognize that inclusion and justice are core Islamic finance values, so the gender and climate lens resonate with the ethical dimension of Shariah,” Debashis noted, adding that engagement with scholars has been constructive, albeit deliberative.

Regulators, meanwhile, have focused on ensuring that impact claims are robust.

“Regulators have asked for clear definitions, disclosure standards and monitoring frameworks so that ‘impact’ is not a marketing label but a measurable outcome.”

IIX is now working toward standardized templates for gender and inclusion metrics within Islamic capital markets, with the expectation that greater issuance volume will drive demand for comparability and benchmarking across jurisdictions.

Global pipeline

Beyond Indonesia, Bangladesh and Japan, IIX is actively engaging with new markets as it looks to expand the Orange Sukuk framework across Asia and into the Middle East. Debashis said priority is given to jurisdictions with clear social or climate financing gaps, Shariah-compliant capital market infrastructure, and a receptive investor base.

“In the next 12–18 months we are engaging with jurisdictions in Southeast Asia and the broader MENA region where these conditions align,” he said.

“At the same time, we are exploring sectors beyond MSMEs to include climate adaptation infrastructure, social housing with a gender lens and digital finance for underserved women.”

Over the longer term, IIX envisions a network of Orange Capital Markets – locally adapted but united by a shared thematic and Shariah-compliant framework.

“Our roadmap is not just about issuing one Orange Sukuk here or there; it’s about creating a template, a brand and a market category, where ‘Orange’ becomes synonymous with high-integrity, high-impact, Shariah-compliant capital,” Debashis concluded.

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