Infrastructure Financing through Islamic
Finance in the Islamic Countries
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population. The research recommends developing innovative models of zakat and waqf to tap
into additional resources for providing social infrastructure services.
International Sources
The Islamic Development Bank (IDB) is the only multilateral development bank providing
Shariah compliant financing for infrastructure projects. IDB has also partnered with other
multilateral development banks such as the Asian Development Bank to establish Islamic
infrastructure funds. However, given the needs of OIC member countries, the amount of
Shariah compliant funds available is relatively small. For example, since 2016, IDB has
provided financing of an average of around USD 125 million per country. Given the other
mandates of IDB beyond project financing, this study proposes the establishment of an
International Islamic Infrastructure Bank (IIIB) that can act as a catalyst to mobilize funds to
be invested in infrastructure projects. Other than providing financing, IIIB can also offer other
technical assistance and advisory services to enhance the capabilities and skills needed in the
development of infrastructure projects.
Reduce Knowledge Gap and Capacity Building
There is a need to reduce the knowledge gap on the use of Islamic finance for PPP projects and
enhance the awareness among stakeholders to increase the use of Islamic finance for
infrastructure projects. This can be done by developing detailed case studies and a data
repository on Islamic PPP project financing from different parts of the world. Furthermore,
there is a need to develop templates for Shariah structures that can be used for different
infrastructure projects to encourage them to invest in the sector. Finally, there is a need to
build capacity by developing executive training programs for stakeholders by using technical
assistance from multilateral development organizations.
The key recommendations to enhance the role of Islamic finance in infrastructure
development at different levels and the stakeholders responsible for implementing them are
presented in the table below.