Ugo Aliogo in Riyadh, Saudi Arabia
The President of the Islamic Development Bank (IsDB), Dr. Muhammad Al Jasser, has stated that the global economy will $15 trillion to finance long-term solutions, sustainable infrastructure projects, adding that the world needs long-term solutions, and sustainable infrastructure projects, and financing these projects requires a paradigm shift.
He also stated that estimates suggest a staggering US$ 15 trillion infrastructure financing gap by 2040.
Speaking at a side event with the theme: ‘Leveraging Islamic Finance for Developing Sustainable and Resilient Infrastructure at the 2024 IsDB Group Annual Meetings, Al Jasser, remarked that the traditional public financing mechanisms fall short of meeting the growing demand for infrastructure projects.
He revealed that to address these challenges and mobilize sufficient funding for long-term investments, there is need for a fresh approach, adding that this is where Islamic finance emerges as a ray of light.
He averred that the bank’s asset-based and risk-sharing principles perfectly align with the needs of least-developed countries for long-term infrastructure projects.
Al Jasser further explained that the Islamic finance, with its emphasis on environmental responsibility, is perfectly positioned to support these endeavours.
According to him, “For the last five decades, the Islamic Development Bank has championed Islamic finance. Our strategy revolves around forging strong partnerships, fostering financial markets, and empowering the private sector. Robust governance is crucial to ensure effective risk mitigation within this system.
“Asset-based and risk-sharing financial products for infrastructure financing remain a niche area within the overall financial system. Multilateral development banks can play a vital role in developing the necessary financial infrastructure to attract private capital flows toward developing countries. A collective effort by MDBs can significantly boost investor confidence.”
“The Islamic Development Bank Group stands ready to lead the charge. Together, let us unlock the potential of Islamic finance and bridge the infrastructure financing gap. Let us build a future that is not only prosperous but also sustainable and equitable for all.
“We stand at a crossroads. COVID-19 exposed vulnerabilities in infrastructure, draining public resources and reversing development progress. One-third of least-developed countries are now worse off than pre-pandemic. Without immediate action, their development outlook could further deteriorate.
“Least-developed countries hold tremendous economic potential waiting to be unleashed. Boosting investments in social and physical infrastructure is key to reducing poverty, enhancing health and education, and creating jobs. It also strengthens resilience against future shocks, such as pandemics and climate change.”
