To help fill a gap in infrastructure investment among its member countries, the Saudi-based Islamic Development Bank (IDB) plans to raise two funds worth $1 billion that will be deployed to Africa and Asia in 2019. The decision from IDB, the largest development organisation in the muslim world, follows the launch of a $500 million technology focused fund in April 2018.
Mohamed Nouri Jouini, Vice President of Partnership Development said the new funds will help close a deficit in investment for projects such as transportation, energy, and sanitation across the two regions. He notes that “this is a new policy of the IDB in terms of putting a focus on thematic areas, whether its infrastructure, science and technology or other areas”.
In Africa, where more than half of IDB’s member countries are located, there is an annual public gap in infrastructure investments that exceed $87 billion. On the sidelines of the annual meetings of the International Monetary Fund and World Bank Group, Jouini said the IDB is in discussions to attract financial contributions to the funds set aside for the two continents. He also revealed that the bank is looking to select external managers for the project.
Most of the Islamic Development Bank’s funds have been managed internally, this includes the bank’s two flagship infrastructure funds. The bank however aims to hire external managers to help improve governance.