‘Islamic capital mart can play bigger role’
KUALA LUMPUR: With the annual global infrastructure investments of between US$2.65 and US$3.7 trillion (RM16.05 trillion) as per World Bank study, Islamic finance can play a greater role in infrastructure financing via public-private partnerships (PPP) to facilitate more sustainable developments.
Securities Commission (SC) chairman Tan Sri Ranjit Ajit Singh said critical factor for infrastructure financing is to successfully bridge the gap between the demand and the supply of capital, referring to the World Bank’s findings that emerging markets and developing economies face an annual infrastructure investment gap of US$452 billion.
“The SC has long recognised the promising potential of the Islamic capital market as an alternative avenue for large-scale long-term fundraising.
“In this regard, sukuk, given their asset-based and risksharing nature, are particularly apt for infrastructure financing,” he said at a joint conference, here, yesterday after an SCWorld Bank Group Conference themed “Islamic Finance and Public-Private Partnerships for Infrastructure Development”.
The Global Infrastructure Investment Index 2016 ranked Malaysia as the second-most attractive destination for infrastructure investment in Asia, and fifth in the world.
World Bank Group infrastructure, guarantees and public-private partnerships senior director Laurence Carter said the group believes that Islamic finance has an important role to play in addressing the development challenges facing its client countries.
“The World Bank Group’s involvement in Islamic finance is directly linked to our objectives of reducing poverty, promoting financial sector development, broadening financial inclusion, and building financial sector stability and resilience in client countries,” he said. Farah Adilla