Infrastructure Financing through Islamic
Finance in the Islamic Countries
86
CWLS was launched on November 1st, 2018 during the celebration of the 10 year anniversary
of SBSN via the signing of the CWLS memorandum of understanding between Bank Indonesia,
the Ministry of Finance, the Ministry of Religion and the BWI. Fortunately, within only one
week prior to such a launching event in November 2018, BWI and FWP successfully collected
IDR 21.2 billion (USD1.5 million) cash waqf for CWLS. Once CWLS is formally launched, MoF
will start using cash waqf funds to finance the government’s social projects in (amongst
others) Palu and Lombok.
Case Study: UNDP and BAZNAS
A novel initiative taken by UNDP and BAZNAS (the National Zakat Collection Agency) in
Indonesia is has been to use zakat funds to provide electricity to deprived households living in
remote rural villages in Jambi in Sumatra. With the aim of achieving SDGs (No Poverty and
Affordable and Clean Energy), BAZNAS channeled USD 350,000 in zakat funds for the
generation of micro-hydro energy in a cost-sharing partnership with UNDP-Global
Environment Facility project and the state-owned Bank Jambi. Inaugurated in April 2018 with
the involvement of New and Renewable Energy and Energy Conservation, Ministry of Energy
and Mineral Resources, and the provincial government of Jambi, the micro-hydro power plants
(PLTMH) were operational in August 2018. Once operational, four PLTMH produced a total of
180kw of electricity that would be able to provide power to 803 households, 7 schools, 4
mosques, 19 mushala (prayer rooms), one Islamic boarding school, and other village
infrastructure.31
Chart 4.1. 10: Number of Projects and Financing from IDB: Indonesia (USD million)
Source:
31 See UN and Dag Hammarskjold Foundation (undated) and UNDP (2018).
836.3
2,952.3
6
109
0
20
40
60
80
100
120
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Total Project Financing 2016+ Total Project Financing (1976-2016)
No. of Projects UD$ (Million)
Total Financing (US$ Million) No. of Projects