October 11, 2018 / 7:57 AM / in 9 months

Saudi-based IDB plans infrastructure funds for Africa and Asia

A view of the exterior building of the Islamic Development Bank Group in Jeddah, Saudi Arabia May 31, 2018. . REUTERS/Reem Baeshen

NUSA DUA, Indonesia (Reuters) - The Saudi-based Islamic Development Bank (IDB) plans to launch two funds focused on Africa and Asia next year, aiming to raise a combined $1 billion to help fill a gap in infrastructure investment among its member countries.

The plans from the IDB, the largest development organization in the Muslim world, follow the launch of a $500 million technology-focused fund in April of this year.

The new funds would help close a deficit in investments for projects such as transportation, energy and sanitation across the two regions, said Mohamed Nouri Jouini, vice president of partnership development.

“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.”

The IDB estimates that in Africa, where more than half of its member countries are located, there is an annual public gap in infrastructure investments that exceeds $87 billion.

The bank is currently in discussions to attract financial contributions to the new funds and also for selecting external managers, Jouini said on the sidelines of the annual meetings of the International Monetary Fund and World Bank Group.

Most of the IDB’s funds have been managed internally, including its two flagship infrastructure funds, but the bank is aiming to attract external managers to help improve governance.

Reporting by Bernardo Vizcaino; Editing by Simon Cameron-Moore

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