Islamic Development Bank reveals co-financing plans with AIIB

The Islamic Development Bank (IDB) is planning to partner with the Asian Infrastructure Investment Bank (AIIB) to “co-finance many projects,” the IDB’s President, Bandar Hajjar, has told the Financial Times.

Captialised at US$150bn, the IDB is the largest development organisation in the Muslim world, and funds infrastructure projects across Asia and Africa. Many of the IDB’s 57 member countries overlap with the AIIB’s 80 members, with some of the IDB’s largest shareholders including Saudi Arabia, Iran, Turkey, UAE, Pakistan and Indonesia.

“Africa needs… about $150bn a year to finance infrastructure and there are about 650m people in Africa without access to electricity,” Mr Hajjar said. “We will co-finance many projects [with AIIB] in the future in Africa.”

According to the GBTimes, the partnership ‘is expected to create a new force in development finance for many developing countries.’

The partnership reflects an expanding international presence for the AIIB, which has already signed co-operation agreements with the World Bank, the Asian Development Bank and the European Bank for Reconstruction and Development.

Meanwhile, the IDB is also planning to launch its largest single bond – a sukuk issue of $2.5bn — to support infrastructure, education, health and other projects within the bank’s 57 member nations soon, according to the Islamic Finance news platform, islamicfinance.com.

Islamic Finance will the subject of a briefing by Rehan M. Shaikh, Chief Executive Officer of Standard Chartered Saadiq, at Asia House on 7 March.