Infrastructure Financing through Islamic
Finance in the Islamic Countries
10
sustainable infrastructure, the other SDGs reflect some of the infrastructure sectors. For
example, SDG 6 relates to the development of the water and sanitation infrastructure and SDG
7 would require the development of the energy sector. Similarly, achieving SDG 3 would
depend on the availability of the health infrastructure and SDG 4 on education infrastructure.
It should be noted the SDGs 13 ( Climate action), 14 (Life below water) and 15 (Life on land)
impose a qualitative overlay of sustainability on all types of infrastructure projects.
Table 1.2: SDGs and Infrastructure Types and Quality
Infrastructure Types
& Quality
Relevant SDGs
Overall Infrastructure SDG 9: Industry, innovation and infrastructure
Economic Infrastructure SDG 6: Clean water and sanitation
SDG 7: Affordable and clean energy
SDG 11: Sustainable cities and communities
Social Infrastructure SDG 3: Good health and well-being
SDG 4: Quality education
Source: Author’s own
A key factor in the achievement of the SDGs in most countries would be the existence of
supporting sustainable infrastructure. Sustainable infrastructure ‘minimises unintended social,
environmental and economic risks and offers additional benefits, which are related to
achieving the Sustainable Development Goals, e.g. in the field of job creation, poverty
alleviation, participation, gender, climate change, biodiversity, or financial benefits for the
public’ (Wiener and Didillon 2016: 6). Thus, sustainable infrastructure projects will have a
triple-bottom line that is ‘economically, socially and environmentally sustainable’ and would
integrate the environment, social and governance (ESG) aspects into all phases of project
implementation (World Bank 2008; McKinsey 2016: 8). From a sustainability perspective,
investments in infrastructure would require not only increasing the quantity of investments
but also improving its quality in terms of avoiding negative externalities. For example,
provision of clean energy and transportation services to the rural poor where the bulk of the
population lives in many developing countries would enhance production in microenterprises
and also reduce the use of wood as a source of energy. On the contrary, while a fossil fuel based
power plant can generate electricity which can enhance production, it can also add to pollution
(negative externality) that can be harmful to the community and environment. Similarly, the
transportation infrastructure in big urban areas could focus on developing low-emissions and
energy efficient mass-transit transit systems instead of developing traditional roads (IFC
2018a).
1.2. Brief Overview of Global Infrastructure Needs and Financing Gaps
The current status of the SDG9 which directly relates to infrastructure and overall
infrastructure quality for different income-level country groupings and OIC member countries
(MCs) is shown in Chart 1.1. 2 The chart shows that while the current index value of OIC
countries is achieving SDG9 (24.3) and infrastructure quality (39.6) is relatively better than
the lower income and lower-middle income countries, they still need significant improvements
2 Note that the regional and income-level country groupings include OIC member countries. However, they are dispersed in
these groupings according to their income status and geographical locations.