Infrastructure Financing through Islamic
Finance in the Islamic Countries
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Chapter 3: Islamic Finance as an Alternative Source for Long-Term Infrastructure
Financing
The third chapter begins with presenting the principles of Islamic finance relevant to
infrastructure investments and then providing an overview of the Islamic financial industry.
The roles of different sectors within the Islamic financial industry such as Islamic banking,
Islamic capital markets/sukuk, nonbank financial institutions, and social sectors in
contributing to infrastructure investments are then discussed. For each of these sectors, an
overview of the contacts/structures/approaches that can be used to finance projects and a
critical evaluation of the challenges and prospects in financing infrastructure projects is
provided. After presenting the role of public-private partnerships and international initiatives,
case studies on the involvement of some Islamic financial sectors in financing infrastructure is
provided to support the arguments.
Chapter 4: Case Studies of Selected Countries
As indicated, the study plans to undertake case studies of five OIC MCs (Indonesia, Malaysia,
Nigeria, Saudi Arabia and Sudan) and one non-OIC country (United Kingdom). For each
country, information and analysis on the following topics is presented (if they exist and are
available): Islamic Finance Industry Overview, Total current status and projected investments
in infrastructure sectors, national level policies and framework related to infrastructure
development, legal and regulatory framework for infrastructure investments, and the role of
different Islamic financial sectors (Islamic banks, capital markets, Islamic nonbank financial
institutions, social sector, public-private partnerships and international sources) in
contributing to infrastructure finance.
Chapter 5: Policy Recommendations
After identifying the issues from the literature and country case studies, this chapter provides
policy recommendations under the following broad headings: infrastructure related strategy
and policies, legal and regulatory framework, government and government-linked companies,
financial institutions, capital markets, Islamic social sector, and multilateral institutions.
Chapter 6: Conclusion
After highlighting the infrastructure financing gaps, the status of Islamic finance and its role in
financing infrastructure investments along with the experiences from the country case studies
will be presented. The concluding part of the chapter will highlight the key policy
recommendations that can enhance the contribution of the Islamic finance industry in
infrastructure development.