Infrastructure Financing through Islamic
Finance in the Islamic Countries
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Table 5. 1: Policy Recommendations for Infrastructure-Related Strategies and Policies
No. Recommendations Specific Steps Implemented by
1.1 Develop Long, Medium
and Short-term
Strategies and Plans
 Long-term national level
development strategy or vision
 Medium-term strategy or plans
for infrastructure development
 Short term plans identify
priority projects that would be
implemented
 Incorporating qualitative
aspects of sustainability and
environment related
implications in infrastructure
plans and strategies
 Highest level of
government
 Ministry of Planning
/ Economic
Development
 Relevant
government
ministries or a
specialized public
body
1.2 Develop a sound PPP
Framework
 Set up a specific department
or agency or an independent
authority that is responsible
for implementing PPP
regulations and projects
 Relevant
government ministry
responsible for
infrastructure
development and
planning
1.3 Setup Other Supportive
Institutional Setups to
Enhance Private Sector
Infrastructure
Investments
 Institution to provide advisory
services on PPP
implementation
 Guarantees on PPP Contract
Implementation
 Relevant
government ministry
responsible for
infrastructure
development and
planning
5.2. Legal and Regulatory framework
Since infrastructure projects are large and complex with long maturities, there is a need to
have a predictable legal and regulatory framework to mitigate legal uncertainties and risks.
The relevant laws and regulations that can provide a sound environment for increasing the
role of Islamic finance investments identified for different countries are discussed to come up
with policy implications and increase private sector participation.
5.2.1. Laws/Regulations Governing Private Sector Participation in Infrastructure
Countries have a variety of legal/regulatory frameworks for private sector participation in
infrastructure projects. In Nigeria, the Infrastructure Concession Regulatory Commission
(Establishment) Act 2005 regulates PPP contracts and authorizes the Commission to provide
further rules and regulations on PPP to create an enabling environment for infrastructure
investments in the country. While the Presidential Regulations (38/2015) provides the general
framework for PPP in Indonesia, the Minister of National Development Planning/Head of
National Planning Agency Regulation No. 3/2012 outlines the general operational guidelines
for the implementation of PPP projects. The formal legal framework for PPP in Saudi Arabia
was developed recently with the establishment of the National Centre for Privatization & PPP
(NCP) which issued the Privatization Projects Manual in 2018. In Malaysia, there is specific no