| July 7
July 7 A new infrastructure fund from the
Islamic Development Bank aims to help Gulf-based
companies expand in Asia and Africa, developing stronger
economic ties among these regions.
Jeddah-based IDB is keen to grow trade among its 56 member
countries and fill a void left by other multilateral and
private-sector financial institutions that have been slow to
support such regional strategies.
The fund could jump-start sluggish levels of trade across
these markets, helping the IDB in its efforts to reach a target
of 20 percent of intra-member trade by 2015 from about 17
But more needs to be done to reach that target: Exports
among IDB-member countries reached $343.7 billion as of 2011,
representing only 15.3 percent of total exports and a drop from
the 17.3 percent recorded in 2009, the latest IDB data showed.
Three-quarters of those exports came from only 10 member
countries, such as Indonesia, the United Arab Emirates and
Turkey. Nigeria, Egypt and Bangladesh ranked far lower, despite
the significant opportunities in those markets.
Part of the problem is limited support from financial
institutions in these regions, many lacking a regional presence
of their own, a gap which the IDB fund could help fill.
IDB, which promotes economic development in Muslim countries
and communities, has ramped up its development efforts after it
more than tripled its authorised capital in 2012.
Building regional links would allow some Gulf-focused
companies to reach a far broader customer base, said Mumtaz
Khan, chief executive of Bahrain-based ASMA Capital Partners,
which is managing the IDB fund.
"There are not that many institutions that have a footprint
across these regions. Some companies are confined to a country
or region. We are talking about taking them further afield,"
Both Gulf and Asian-based companies could build substantial
market share in these new markets, said Khan, adding that the
fund was looking at opportunities in Nigeria, Egypt, Pakistan
The fund has $750 million in commitments from shareholders
Saudi Arabia, Bahrain and Brunei, with plans to reach $2 billion
in size by next year, surpassing the original $730 million fund
launched in 2001..
In contrast to its predecessor, the new fund also has a
special sector allocation to health, said Kahn, adding that the
fund could deploy capital into its first project in the next two
to three months.
(Editing by Jacqueline Wong)