JEDDAH, 11 June 2008 — Fifty-six Muslim countries are expected to invest nearly $1.2 trillion in infrastructure projects over the next 10 years, especially in telecom, transport, power, water and other vital sector, a report issued by the Jeddah-based Islamic Development Bank (IDB) Group announced yesterday.
The report said some $675 billion would be invested to finance new telecom and power projects in IDB member countries, adding that half of that amount would be in the Gulf Cooperation Council states of Saudi Arabia, Qatar, UAE, Kuwait, Bahrain and Oman. The IDB countries will also invest $290 billion in expanding and upgrading air, sea and land transport infrastructure, with half of that investment taking place in Asia, the report said.
They will invest as much as $115 billion in water projects to expand and improve the provision of water and sanitation services, the report said, adding that nearly 60 percent of this investment would be in Arab and African member countries.
“While only a fraction of the investment requirements is currently being met by the private sector, IDB sees a greater private sector role in meeting demand for infrastructure services over the next decade,” the report quoted Dr. Amadou Boubacar Cisse, IDB’s vice president for operations, as saying. He said IDB would invest up to $25 billion in infrastructure projects over the next 10 years, mainly in power, transport and water sectors.
The report referred to an international seminar hosted by the IDB on the sidelines of its governors’ conference, which was held earlier this month. More than 250 delegates from over 50 countries, including bankers, business leaders and senior executives of national development finance institutions took part in the event, which featured groundbreaking infrastructure projects such as the new Haj and Umrah terminals, Petro Rabigh and SABIC’s Yansab petrochemical project. Other investments IDB showcased at this event included Dubai Port World’s seaport terminal container project in Djibouti financed by IDB and the World Bank, toll-road projects in Malaysia and Morocco and a desalination plant in Qatar.
Dr. Nahed Taher, CEO of Gulf One Investment Bank, who attended the IDB event, highlighted the need to pay due attention to the environmental dimension of new projects, especially their carbon footprint, in order to minimize the impact of harmful greenhouse gas emissions. She urged project developers to seek carbon finance opportunities currently being offered by the Kyoto Protocol’s Clean Development Mechanism, or CDM as it is commonly known, which is an arrangement that basically allows developed countries to invest in projects that reduce emissions in developing countries as an alternative to more expensive emission reductions in their own countries.
Japan’s consul general in Jeddah, Toshimitsu Ishigure, emphasized his government’s intent to cooperate with IDB in the field of infrastructure development, especially in Africa, following the recent announcement of Prime Minister Yasuo Fukuda to boost aid to Africa. Fukuda made this commitment on the occasion of the Fourth Tokyo International Conference on African Development in Japan last month.
