Infrastructure Financing through Islamic
Finance in the Islamic Countries
158
Chart 4.6. 2: Infrastructure Pipeline in UK by Sector 2016-2021 (GBP billion)
Source: IPA (2016: 23)
Table 4.6.1 shows the infrastructure needs and gaps that are projected for different sectors
during the period 2016-2040. While most of the infrastructure sectors are projected to have
little to no gaps over this period, the transportation sector is projected to have the largest
deficit (GBP 136 billion) followed by airports (GBP 10 billion).
Table 4.6. 1: Infrastructure Needs and Gaps United Kingdom 2016-2040
(Billion USD 2015 prices and exchange rates)
Road Rail Airports Ports Telecoms Electricity Water Total
Current trends 319 387 72 14 303 332 233 1,660
Investment need 320 523 82 16 303 332 234 1,809
Gap between IN and CT 0 136 10 1 0 0 1 148
Source: Global Infrastructure Outlook
4.6.3. National Level Policies and Framework of Infrastructure Development
The UK moved to increase the role of the private sector in infrastructure during the reign of
the Conservative Prime Minister Margaret Thatcher and the trend continued in the later
regimes. The Private Finance Initiative (PFI) was introduced in 1992 by the government of
John Major to provide a framework for using PPP in infrastructure projects. In 2012, HM
Treasury further developed the framework to further enhance the role of private sector
participation by issuing the document ‘A new approach to public private partnerships’. Termed
as Private Finance 2 (PF2), the document highlights the ways in which the private sector can
engage in the development of infrastructure by outlining its role in providing equity and debt-
financing to enhance efficiency, transparency and value for money in infrastructure projects
(HM Treasury 2012; Richards et. al. 2018).
Recognizing the importance of infrastructure in the economy, the government of the UK
established two public institutions to deal with the orderly development of infrastructure in
the country. The National Infrastructure Commission (NIC) was established to provide expert
6
255.7
4.1 5.5
134.5
0.5
19.3
2
109
6
25
166
10
1 0
20
40
60
80
100
120
140
160
180
0
50
100
150
200
250
300
No. of Projects GBP (Billion)
Value (GBP Billion) No. of Projects