(MENAFN - Arab News) Marrakesh, Morocco: The Islamic Development Bank (IDB) and the International Finance Corporation (IFC), a member of the World Bank Group, will invest 100 million to support the construction of major infrastructure projects across the Middle East and North Africa, part of an effort to stimulate economic growth in the region.
IDB and IFC are each investing 50 million in the Arab Infrastructure Investment Vehicle (AIIV), which is expected to grow to about to 300-500 million. It is part of the Arab Financing Facility for Infrastructure (AFFI), a joint initiative of the Islamic Development Bank, the World Bank, and IFC. The AFFI provides financing and technical assistance to cross-border infrastructure projects and encourages governments and the private sector to come together to find solutions to infrastructure gaps.
"Governments in the region are facing challenges when it comes to financing major infrastructure projects," said Walid Abdelwahab, director of the Islamic Development Bank's Infrastructure Department. "But several recent successes have shown that the private sector can play a pivotal role in helping deliver essential services to the people of the region."
Gulrez Hoda, IFC Director for Infrastructure for Europe, Middle East and North Africa, said, "Projects like roads, ports and water treatment plants are vital for the economic development of this region. Our investment will help make major projects a reality, delivering essential services to the region's people and providing a solid foundation on which economies can grow and create jobs."
Countries in the Middle East and North Africa need to invest an estimated 70 billion annually in infrastructure to sustain their growth rates. The AFFI supports cross-border projects designed to boost regional connectivity, including electricity, rail, road and maritime networks. The AIIV, with IDB and IFC as anchor investors, will provide private investment to support public-private partnerships and explore the possibility of Shariah-compliant financing.
It is part of IDB's and IFC's efforts in the Middle East and North Africa to support economic development during a time of change. Since January 2011, IFC has channeled over 2 billion into the region, including mobilization. Meanwhile, IDB Group has contributed about 3 billion in public and private sector project financing along with trade related activities.