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Islamic Development Bank and Gates Foundation approve US$718m investment in development projects

More than US$718 million will be invested in roads, power generation, water supply, sanitation, agriculture and rural development projects in a number of countries after the Islamic Development Bank (IDB) approved a funding partnership with the Bill and Melinda Gates Foundation.16 Mar 2015

The projects will be in Turkey, the Sultanate of Brunei, Uganda, Uzbekistan, Cote d'Ivoire and Benin, the IDB said in a statement.

Technical assistance will also be given to projects in Bahrain, the Bank said.

Approved projects include a $300m "restricted mudarba financing" for the Turkish General Directorate of Foundations. Mudarba is an Islamic finance model in which one side provides finance and the other side provides labour, according to Islamic Economics.  The General Directorate of Foundations is a government body that manages and protects the foundations of historical buildings.

In Oman, $225m has been dedicated to turning the Al Kamil-Sur road project into a dual carriageway.

The Grid Rural Electrification project in Uganda will receive $70.7m, while $57.5m was approved for the Syrdarya region sewerage improvement project in Uzbekistan.

The IDB will contribute $27m to a certified rice seed project in Cote d'Ivoire, and a development project for rural irrigation in Benin. The Marib Power Dispatch project in Yemen will receive $18m.

Three educational and vocational projects for Muslim communities in Kenya, New Zealand and South Africa will receive grants worth a total of $430,000, and a $100,000 grant will contribute to feasibility studies in agricultural projects in Sudan.

A joint financing mechanism will be set up between the IDB and the Bill and Melinda Gates Foundation. Teams from the IDB and the Bill and Melinda Gates Foundation are currently working on "the operational, financial and legal details of the mechanism" ahead of the release of the first tranche of funds under the agreement. This first round will see $100m worth of grants issued before the end of this year, the Bank said. Operations are expected to begin in 2016.

The IDB has also agreed to cooperate with the International Monetary Fund on providing technical assistance to countries setting up Islamic financial services, it said.