The Islamic Development Bank (IDB), the Muslim world's premier multilateral financial institution, estimates that its 56 member countries are set to invest up to $1.2 trillion in infrastructure over the next ten years to meet the rapidly growing demand for telecom, transport, power, water and other infrastructure services. Around $675 billion will be used to finance new telecom and power projects, some half of which will be in GCC states, while an additional $290 billion is to be invested in expanding and upgrading air, sea and land transport infrastructure, with half of that investment taking place in Asia. Another major investment area targeted by IDB member countries will be water, where as much as $115 billion will be invested to expand and improve the provision of water and sanitation services over the next decade. Nearly 60 percent of this investment will be in Arab and African IDB member countries.

While only a fraction of the investment requirements is currently being met by the private sector, IDB sees a greater role for the private sector in meeting demand for infrastructure services over the next decade, stated Dr Amadou Boubacar Cisse, the IDB Vice President Operations, at the IDB-hosted high level seminar on infrastructure financing held on 31st May 2008 at the Westin Jeddah Hotel. This special event, which was held in conjunction with the IDB annual meeting, featured groundbreaking infrastructure projects such as the new Hajj and Umra terminals, Petro Rabigh and SABIC's Yansab petrochemical project. Other investments IDB showcased at this event also included Dubai Port World's seaport terminal container project in Djibouti financed by IDB and the World Bank, toll-road projects in Malaysia and Morocco and a desalination plant in Qatar.

Mr Mohammed Binladin, Vice President of the Saudi Binladin Group, brilliantly presented the new Hajj and Umra terminals construction and development project, which is expected to significantly improve both the handling capacity and quality of service provided at the Kingdom's main gateway. Mr Othman Fassi-Fahri, General Manager of Morocco's highway authority, for his part, highlighted his country's impressive highway development programme, while Mr Waleed Al-Saif, a senior executive at Saudi Arabia's Petro Rabigh (a major joint-venture between Saudi Aramco and Japan's Sumitomo Chemical, a leading petrochemical firm), provided an excellent overview of this pioneering Saudi-led enterprise that aims to firmly establish the Kingdom as a major player in the global petrochemical industry.

This IDB-hosted international business gathering attracted more than 250 participants from over 50 countries, including international bankers, business executives mainly from leading contracting and consulting firms from IDB member countries, senior executives of national development finance institutions, representatives of diplomatic missions, and academic and research institutions.

Dr Nahed Taher, CEO of Gulf One Investment Bank, who attended the IDB event, for her part, highlighted the need to pay due attention to the environmental dimension of new projects, especially their carbon footprint, in order to minimise the impact of harmful greenhouse gas emissions, she said. She further urged project developers to seek carbon finance opportunities currently being offered by the Kyoto Protocol's Clean Development Mechanism, or CDM as it is commonly known, which is an arrangement that basically allows developed countries to invest in projects that reduce emissions in developing countries as an alternative to more expensive emission reductions in their own countries.

Mr Toshimitsu Ishigure, Japan's Consul General in Jeddah, who also participated in the event, subsequently indicated the keen desire of the Government of Japan to cooperate more closely with IDB in the field of infrastructure development, especially in Africa, following the recent announcement of Mr Yasuo Fukuda, Prime Minister of Japan, to boost aid to Africa (this commitment was made on the occasion of the Fourth Tokyo International Conference on African Development [TICAD IV], which gathered at the end of May 2008 in Yokohama in Japan 51 African heads of states and governments to seal a new Japan-Africa partnership). IDB's strong focus on developing infrastructure services provides an excellent opportunity to create synergies between IDB and Japan on the heels of TICAD IV, Mr Ishigure said.

Commenting on IDB's role in infrastructure financing, Dr Cisse indicated that the IDB Group expected to invest up to $20-25 billion in the infrastructure sector over the next 10 years. This investment is expected to target mainly power, transport and water projects. Climate change adaptation and mitigation is likely to stimulate further demand for investment in cleaner energy, energy efficiency as well as water storage infrastructure and flood protection, he added. Similarly, the on-going concern over global food security is expected to trigger a new wave of major hydraulics infrastructure schemes in IDB member countries, in order to achieve greater food security through sustainable agricultural development underpinned by sound water resources management, Dr Cisse said. Last year the IDB Group provided around $2 billion of financing for infrastructure projects in more than 30 countries in Africa, Asia, Europe and the Middle East.