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SARAJEVO / Reuters
The Islamic Development Bank (IDB), the largest development organisation in the Muslim world, plans to revamp its operations, including a shift away from small-scale capital interventions to more sustainable, grassroot-level support.
The non-profit group has extended $86.1 billion in financing in the last ten years for energy, transportation, water and sanitation projects. Bangladesh, Pakistan and Egypt are among the top beneficiaries.
But its new president, Bandar Hajjar, said the bank needed to decentralise and change the way it operates.
“IDB needs to shift away from providing individual, small-scale intervention to value chain solutions,” Hajjar said on the sidelines of a business conference in the Bosnian capital Sarajevo.
The IDB has traditionally provided capital and technical assistance to individual firms and government organisations, but Hajjar said the bank would engage a wider array of entities and plans to form a network of non-governmental organisations, foundations and universities.
“The shift will help the bank deal with development challenges in a more sustainable and efficient manner. We will create a network and the bank will play a role of a catalyser.” Hajjar, Saudi Arabia’s former haj minister, was elected president of the IDB last year, replacing long-serving Ahmad Mohamed Ali who steered the bank since its establishment in 1975.
“The challenge is huge, immense, complicated and IDB cannot solve these problems by itself and all this requires decentralisation,” Hajjar said.
Hajjar said sukuk issuance for 2017 was set at some $1.25 billion for public sukuk and $300 million for private sukuk, but that another issue of $1 billion worth of sukuk is expected before the end of this year.
Saudi Arabia is the largest shareholder of IDB with 23.5 percent of share capital subscription, followed by Libya, Iran,
Nigeria and the United Arab Emirates.
The IDB tripled its authorised capital to $150 billion in 2013 and in 2015 up-sized its flagship Islamic bonds (sukuk) issuance programme to $25 billion.
The bank also expects to appoint a new vice-president for finances, a position vacant for a year now, who Hajjar said would be tasked with restructuring the department of finance.