World Bank and IDB launch $1bn development fund for MENA region

The World Bank is to set up a regional $1bn development fund in cooperation with the Islamic Development Bank (IDB) to close the infrastructure gap in the Middle East and North Africa region. 

This regional initiative will unlock new flows of private sector investment to help countries like Egypt, Morocco, Jordan or Tunisia eager to push ahead with critical infrastructure projects that will drive competitiveness and boost much needed job creation.

The Middle East and North Africa region needs to invest between $75 billion and $100 billion a year to sustain the growth rates that have been achieved in recent years and to boost economic competitiveness, the World Bank said. It added that private sector investment in infrastructure in Mena countries is limited, especially outside the Gulf countries despite huge unmet demand for infrastructure services.

Both the Islamic Development Bank and the International Finance Corporation (IFC), the private sector arm of the World Bank Group, will work together to explore ways of providing project finance in both conventional and Shariah-compliant products, which would seek to attract private investors, especially from Gulf countries.

IFC's approach to infrastructure projects includes advising governments in structuring innovative public-private partnerships and financing precedent-setting transactions. In particular, IFC supports cross-border projects from Gulf countries into emerging markets that commercial banks would consider too risky without IFC’s involvement. Over the past four years, IFC has invested more than $1 billion in infrastructure projects in MENA region.