The IFC, a member of the World Bank Group, and the Islamic Development Bank (IDB) have announced an investment of up to $100 million to support the construction of major infrastructure projects across the Middle East and North Africa.
The investment is part of an effort to stimulate economic growth in the MENA region. The IFC and IDB are each investing $50 million in the Arab Infrastructure Investment Vehicle (AIIV), part of the Arab Financing Facility for Infrastructure (AFFI), a joint initiative of the World Bank, the IDB 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.
According to the IFC, 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 the IFC and IDB as anchor investors, will provide private investment to support public-private partnerships and explore the possibility of Shariah-compliant financing.
Commenting, Walid Abdelwahab, director of the IDB’s Infrastructure Department, said: "Governments in the region are facing challenges when it comes to financing major infrastructure projects. 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, the IFC’s 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."
Since January 2011, the IFC has invested over $2 billion into the MENA region. The IDB has contributed about $3 billion in public and private sector project financing, along with trade-related activities.