Infrastructure Financing through Islamic
Finance in the Islamic Countries
19
perform at the different stages of the development of a project as identified below (World
Bank 2017c: 6).
Design
: Preparing the developing project plan in terms of initial concept, input and output
requirements for construction. In this planning stage, the details of project assets and how they
will be financed will be delineated.
Build or Rehabilitate
: Greenfield projects would involve building new assets and brownfield
projects would rehabilitate existing assets.
Finance
: Depending on the contractual arrangements, the private sector has to finance all or
part of the costs of building or rehabilitating projects.
Maintain:
The infrastructure assets have long lives and have to be maintained. The role of the
private sector in the maintenance of the assets will be specified in the contract.
Operate:
Depending on the nature of infrastructure assets and the services produced, the
contracts will determine the role of the private sector in operating the infrastructure projects.
Types of contractual arrangements may involve the following: technical operation of the
project and the provision of services to a government-related off-taker; technical operation of
the project and the provision of services to direct users; and the provision of support services
for operations with the government offering services to the end-users.
Given the above, different types of contracts can be used to involve the private-sector in
infrastructure projects. Table 2.1 shows the contracts that can be used to engage the private
sector for developing and operating infrastructure projects covering different functions.
Table 2.1: Contract Types Used for Infrastructure Projects Involving Private Sector
Contract Type
Functions
Asset
Type
a
Design
Build
Rehabilitate
Finance
Maintain
Operate
Design-Build-Finance-
Operate-Maintain
(DBFOM)
x
x
x
x
x
GF
Design-Build-Finance-
Operate (DBFO)
x
x
x
x
GF
Design-Construct-
Manage-Finance
(DCMF)
x
x
x
x
GF
Build-Operate-
Transfer (BOT)
x
x
x
x
x
GF
Build-Own-Operate-
Transfer (BOOT)
x
x
x
x
x
GF
Rehabilitate-Operate-
Transfer (ROT)
x
x
x
x
BF
Concession
x
x
x
x
x
x
GF,BF
Private
Finance
Initiative (PFI)
x
x
x
x
x
GF
Operations
and
Management (O&M)
x
x
BF
a: GF-greenfield; BF-brownfield;
Source: Adapted from World Bank (2017c: 7)