The Islamic Development Bank (IDB) annual meeting in Jakarta yielded a number of big debt financing commitments, while suggesting the IDB could launch its own infrastructure bank.
Reporters on the sidelines of the conference were told that Saudi Arabia, Turkey and Indonesia are keen to launch a shariah-compliant lender for the infrastructure sector, with each respective member contributing US$300mn each.
“It will be the effort of not only the four of us, but also others. But the four will be the founders,” Indonesia’s finance minister Bambang Brodjonegoro is quoted as saying.
Meanwhile, the IDB signed US$1.6bn of loan agreements with 14 of its 53 members, with half of this to be spent in Indonesia. This came on the same day that Indonesia and the IDB announced loan commitments worth US$5.2bn.
This is more than the total IDB investment in the country in the four years to 2014 and will go towards “financing infrastructure, financial inclusion, human resource development and private sector”, the IDB president Ahmad Mohammed Ali said.
Loan agreements were also signed with a host of African countries. Cameroon will borrow US$157mn for a roads project, Chad will borrow US$152mn for transportation works, and Gabon will get US$120m for basic healthcare projects.
Burkina Faso has been loaned US$99.5mn for road and agri works, while Nigeria will spend US$84mn on a power plant project, Gambia US$280mn for a co-operative project with Turkey, and Morocco US$7.5mn for educational development
In the Middle East, Palestine borrowed US$6mn for education projects, Pakistan US$600,000 for solar project research, and Iran US$104mn for an irrigation project. Further east, Bangladesh was loaned US$20mn for housing projects, while Kyrgyzstan borrowed US$11.5mn for toll roadworks.
The development bank welcomed Guyana as a new member. The tiny South American country has a population of 800,000 – 10% of which are Islamic. It joins Suriname as perhaps the most geographically remote members of the IDB. Suriname was able to borrow US$31mn for education projects at the summit.
The 41st summit also saw the election of a new leader. The outgoing president Ali will be replaced by Bandar Hajjar. Ali has been in charge of the bank since 1975, when it was founded.