Orange Sukuk: BPKH's Stewardship Impact Investment Bridge Towards a Sovereign Halal Fund
Indonesia’s role in sustainable financial instruments is increasingly prominent on the global stage. Not only known as the first issuer of green sukuk in 2018, Indonesia now holds the top position as the largest issuer of orange bonds and sukuk globally. This movement targets the ambitious goal of mobilising up to 10 billion US dollars by 2030 to empower 100 million women, aiming to close the funding gap for the Sustainable Development Goals (SDGs) on Gender Equality and Women’s Empowerment. Initiated by PT Permodalan Nasional Madani (PNM), which has issued 980 million US dollars in Orange Bonds, this instrument directly empowers millions of women entrepreneurs.
This is where the strategic role of the Hajj Financial Management Agency (BPKH) becomes key. With managed funds of nearly Rp 200 trillion and a stable yield of around 7 percent, BPKH has integrated Orange Sukuk as a main pillar of sustainable investment, alongside previously adopted green and blue sukuk. The Orange Sukuk uniquely accommodates the intersection between social and environmental impact, which has often been overlooked. For BPKH, this is not merely an investment; these instruments represent a pattern of sustainable development for achieving the SDGs, particularly in poverty alleviation (SDG 1), gender equality (SDG 5), and decent work (SDG 8). This commitment was recognised when BPKH won the ESG Now Awards 2025 from Republika for the Sustainable Investment Initiative and ESG Warrior categories.
This proves that the management of Hajj funds is not only safe and sharia-compliant but also impactful. Financing channelled to women across Indonesia shows a very low non-performing financing (NPF) rate, demonstrating that women’s economic empowerment is a healthy and growing investment, both financially and socially. This success with impact investment is a crucial pillar in realising the Sovereign Halal Fund (SHAF). The SHAF concept was initiated to consolidate non-state-budget public funds from various institutions such as BPKH, the Indonesian Waqf Board (BWI), and the National Zakat Agency (Baznas), whose potential is estimated to reach thousands of triliun rupiah.
BPKH, with its governance that has achieved an Unqualified Opinion (WTP) for eight consecutive years and various ISO certifications, has successfully maintained stable returns and controlled risk, becoming a tangible model for transparent and accountable public fund management. Investment in Orange Sukuk proves that public funds can be managed productively without sacrificing the principle of prudence. This instrument provides real economic impact and social blessings, in line with the objectives of maqashid shariah to protect wealth and progeny. This is a strong foundation for building a closed-loop investment ecosystem, where funds collected from the community (infaq, waqf, zakat, Hajj, Umrah) are managed to finance productive and selective projects, with the results returning for the welfare of the community.
If Orange Sukuk is the proof of concept, then SHAF is the grand vision to consolidate all public funds into a single architecture. Historically, this concept is not new. The Baitul Mal during the era of Caliph Umar bin Khattab was the world’s first prototype of a sovereign fund, managing zakat, fai, and ghanimah for the construction of agricultural canals, transportation, and even defence equipment. KH Ma’ruf Amin has often emphasised that the management of public funds must shift from consumptive to professional and productive. SHAF is the modern manifestation of retracing the steps of that Baitul Mal.
To realise the Golden Indonesia 2045 vision, bold, value-based financing innovation is required. The government and the House of Representatives (DPR) have a major agenda to harmonise regulations and laws, including the Hajj Law, Zakat Law, Waqf Law, Sovereign Sharia Securities Law, and the Capital Market and Sharia Banking Law, through a Halal Fund Omnibus Law. Without this legal umbrella, the potential of thousands of triliun rupiah per year will remain fragmented. Furthermore, regulators such as Bank Indonesia and the Financial Services Authority (OJK) need to formulate a special regulatory sandbox for social impact sukuk, enabling incentives for issuance and placement by both bank and non-bank institutions. The Macroprudential Liquidity Policy (KLM) incentives should also be expanded to include the purchase of Orange Sukuk as an instrument that meets inclusive intermediation ratios.
The sharia banking industry should view Orange Sukuk not as a competitor, but as a partner. Banks can act as underwriters and market makers, while also using the instrument as a hedging tool for MSME credit risk. Academics and practitioners must continue to develop empirical research, following the path of Cash Waqf Linked Sukuk (CWLS), and emphasise the need for a diversified blended finance toolkit to strengthen the resilience of sharia banking against systemic shocks. The tightening of banking liquidity is not the end of the story, but a momentum for innovation. Orange Sukuk has proven that public funds, under strict stewardship governance, can become an inclusive intermediation instrument that yields competitive returns and measurable social impact. With an NPL below 3 percent, an idAAAsy (Triple A Sharia) rating, and millions of women clients, the empirical evidence is undeniable. From this success, we must dare to dream bigger: a Sovereign Halal Fund is not just a perpetual fund, but an economic sovereignty strategy to position Indonesia as a market-maker, not a market-taker, in global halal financial governance.