Islamic finance looks to jump on Asia’s infrastructure bandwagon
Islamic finance aims to move into infrastructure, as governments and bankers plan a new organisation to handle deals and expand efforts to use sukuk for projects in majority-Muslim countries. An estimated US$800 billion (RM2.96 trillion) worth of infrastructure financing will be needed each year in Asia over the next decade. But so far, technical, legal and political issues have mostly confined sharia-compliant infrastructure deals to mid-sized ones with shorter tenors. Only a handful of project finance deals have been done. Governments are now trying to break the impasse. Indonesia, Turkey and the Islamic Development Bank said last month that they planned to launch an Islamic infrastructure bank, with Indonesia and Turkey pledging at least US$300 million each.
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