World Bank and Islamic Development Bank to offer up to $6bn in funding for Mena projects

The two multilateral lenders will support projects designed to improve lives of people amid climate change threat

The World Bank and IsDB partnership was unveiled on the sidelines of the Future Investment Initiative summit in Riyadh. AFP

The World Bank and Jeddah-based Islamic Development Bank (IsDB) are teaming up to support projects in the Mena region that could involve up to $6 billion in financing until 2026.

As part of the partnership, the two lenders will focus on improving the lives of people in the region through better management of water, energy and food resources in the face of threats posed by climate change, the World Bank said on Wednesday.

They will also focus on empowering women and young people with skills to grow in jobs and participate in the digital transition, as well as drive greater regional and cross-border trade and co-operation.

Miga, the political-risk insurance arm of the World Bank, will collaborate closely with the IsDB to mitigate political risk, alongside the World Bank’s International Finance Corporation, which will work to draw in more private sector investment.

The partnership was unveiled on the sidelines of the Future Investment Initiative summit in Riyadh.

“The World Bank is recruiting new partners and reimagining partnerships,” World Bank President Ajay Banga said.

The World Bank is seeking to strengthen partnerships with financial institutions globally and aims to expand the scope of lending to include climate finance, as well as cheaper and longer maturity funding.

In August, it unveiled a partnership with the Inter-American Development Bank to boost support for net-zero-deforestation efforts in the Amazon, strengthen the Caribbean’s resilience to natural disasters and bridge the digital-access gap across Latin America and the Caribbean.

During this month’s World Bank-International Monetary Fund Annual Meetings, the Washington-based lender also announced a collaboration with nine multilateral development banks, including the African Development Bank, the Asian Development Bank and the Asian Infrastructure Investment Bank.

The move is intended to increase financing, boost collective efforts on climate, enhance country-level co-ordination, strengthen joint financing and stimulate private sector engagement.

“Our member countries continue to face overlapping crises in an increasingly uncertain global landscape, making a compelling case for multilateral development banks to respond together,” IsDB president Muhammad Al Jasser, said.

The IsDB, which was founded in 1975, aims to foster economic development and the social progress of member countries and Muslim communities in non-member countries.

The bank’s main function is to provide various forms of development assistance for poverty alleviation and human development while forging economic co-operation and enhancing the role of Islamic finance in the social and economic development of member countries, according to its corporate profile.

In May, the IsDB approved $5.4 billion in development financing for projects in 24 member countries as it seeks to bridge funding gaps in critical sectors.

The new partnership with the World Bank “walks the talk, with a new sense of urgency and determination to give opportunities and hope to the people we serve”, Mr Al Jasser said.