The Saudi Arabia-based Islamic Corporation for the Development of the Private Sector (ICD) plans to raise $1 billion for a new sharia-compliant fund that will focus on infrastructure projects across Africa.
The plan follows a shareholder agreement signed between the ICD, the private sector arm of the Islamic Development Bank , and the private equity arm of India’s Infrastructure Leasing and Financial Services Group.
The fund will launch with 105 million dollars in seed capital and expects to close its initial round of fundraising in the first half of the year, the ICD told newsmen.
The fundraising effort was expected to take approximately 18 months after the first round was closed, the ICD said.
Power and transport would be the main sectors for the fund, which would finance small to mid-sized projects in ICD member countries, with a focus on Africa.
The ICD, established in 1999, supports the economic development of its 53 member countries. In recent years it has sought to widen the appeal of Islamic finance across Africa, home to a quarter of the world’s Muslims.
The ICD has advised several African governments on their plans to issue Islamic bonds, or sukuk, with Senegal, Nigeria and Ivory Coast among those that have tapped the market.
Last month the ICD extended a 100-million dollar financing facility to the Cairo-based African Export-Import Bank (Afreximbank).