IDB to finance Indonesian projects

JAKARTA — The Islamic Development Bank (IDB) plans to help finance power projects in energy-starved Indonesia either through equity participation or by raising funds from the Middle East, a senior IDB official said yesterday.

By (Reuters)

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Published: Fri 28 Jul 2006, 12:38 PM

Last updated: Sat 4 Apr 2015, 1:10 PM

Indonesia is seeking to attract investment in the power sector as the world’s fourth-most populous country tries to catch up with rising electricity demand.

Indonesia’s annual power demand is estimated to be growing at around 10 per cent a year, one of the most robust power markets in Southeast Asia. Indonesia has said it wants to add 24,000 MW of electricity by 2013, in projects estimated to cost $30 billion.

“We will be certainly involved in major infrastructure programmes in the energy sector,” Amadou Boubacar Cisse, vice-president of the Islamic Development Bank, told reporters after meeting Vice President Jusuf Kalla.

“IDB will concentrate on mobilising resources from equity participation as well as specific investment,” Cisse said. ”Particularly in the Middle East region where obviously with increase in oil prices, there is certainly resources available.”

He said the funding would be compliant with Islamic laws, where interest is banned and income must instead be derived fron a fundamental economic transaction.

“It definitely will be Islamic financing. We are an Islamic institution and will be mobilising resources compatible with Sharia.”

Fuelled partly by a flood of petrodollars from high oil prices, global Islamic financial assets are growing at around 15 per cent a year and are estimated at between $200 billion and $500 billion.



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