The Islamic Development Bank’s board of executive directors has approved new finances worth $790 million to carry out different projects in member countries.
The board, which met at the IDB headquarters in Jeddah, discussed the decision taken by IDB governors to increase the bank’s capital from $45 billion to $150 billion.
"The meeting also discussed arrangements to celebrate the bank’s 40th anniversary, which coincides with the next meeting of its board of governors in Jeddah," the bank said.
The board agreed to give $220 million to the renewable energy program of the Development Bank of Turkey and $200 million for an electricity project in Damietta, Egypt.
The new finances approved by the board will also benefit Morocco, Uganda, Pakistan, Burkina Faso, Mozambique, Yemen, Togo, Jordan and Mali. It has also agreed to provide grants to educational projects for Muslim communities in Kenya, Nepal and Congo.
The board meeting, which was chaired by IDB President Ahmad Mohamed Ali, agreed to give $140 million for a water project in Agadir, Morocco and $120 million for a road project in Uganda.
Tunisian Prime Minister Ali Larayedh, who was on a visit to Saudi Arabia during the period, attended the opening session of the board meeting. The IDB president welcomed the prime minister and underscored the cooperation between Tunisia and the IDB over the past years.
The board passed a $35 million loan for Pakistan to finance reconstruction of schools destroyed by the floods. Another loan worth $ 19.8 million will go to a water supply project in Ouahigouya, Burkina Faso. The board also approved $15 million for an integrated rural development project in Yemen.
The rest of the approvals included $8 million for Niassa electrification project in Mozambique, $7 million for an energy project for rural communities in Togo and $23.7 million to finance Mali’s food program. A grant of $200,000 was extended to Jordan for capacity building of rural producer organizations.
The bank decided to increase its capital during a meeting of its board of governors in Tajikistan’s capital Dushanbe last May to meet the growing development requirements of its 56 member countries and carry out its development mission in a more efficient manner.
The Dushanbe meeting also increased the bank’s subscribed capital from 18 billion Islamic dinars to 50 billion Islamic dinars. The decision reflects the bank’s strong financial position.
IDB also announced it would immediately tap the financial market with a $1 billion offering of sukuk or Shariah-compliant bonds. The five-year offering is rated Triple A by each of the three major rating agencies (Standard & Poor’s, Moody’s and Fitch), and will be dually listed on the London Stock Exchange and Bursa Malaysia.
The benchmark $1 billion offering comes amid strong demand and limited supply of the highest quality fixed-income securities, in part because a number of large governments have recently lost their Triple A status. There has also been a growing demand for Shariah-compliant investments.
"The tenets of Islamic banking have stood the test of time," said Ali. "Our emphasis on equity, risk-sharing and partnership enforces discipline on the financial system, allowing us to lift more of our people out of poverty," the IDB president added.
IDB approves $790m for development projects
