Islamic finance has been growing rapidly across the globe. According to a recent report, the Islamic finance market currently stands around $1.9 trillion. With this growth, its application has been extended into many areas—trade, real estate, manufacturing, banking, infrastructure, and more. However, it is still a relatively untapped market for PPP financing.
A new PPIAF-funded report by the World Bank Group and the Islamic Development Bank Group represents the first systematic effort to capture and disseminate knowledge on deploying Islamic finance for infrastructure PPPs. As such, it fills a critical information gap that exists among a vast majority of infrastructure development practitioners.
The report’s goal is to help developing countries tap into Islamic finance as an additional resource to meet their huge and growing infrastructure needs. Our discussion will address how Islamic finance has already been applied in infrastructure projects through PPP schemes, what the structural challenges and solutions are, and what can be done to deepen and maximize the use of Islamic finance for this purpose.