ICD: Azerbaijan has favorable conditions to attract Islamic finance

Azerbaijan has favorable conditions for attracting Islamic finance into large-scale infrastructure and energy projects due to clear risk allocation and active state participation in economic development, Mohammad Asheque, Acting Director General of the Banking Department of the Islamic Corporation for the Development of the Private meeting of the Islamic Development Bank (IsDB) Group in Baku, said at a meeting of the Islamic Development Bank (IsDB) Group in Baku.

Report quotes him as saying transparency in regulation and clear distribution of responsibilities among project participants are crucial for investors and lenders.

According to him, the key challenge in structuring projects is not the choice of financial instruments, but the detailed assessment of risks, economic models, and the long-term sustainability of investments.

"Time is the main enemy of projects, as the cost of resources, materials, and financing is constantly changing," Asheque said.

The ICD representative added that Islamic finance is particularly effective for projects in energy, water supply, renewable energy, transport, and utilities, as it is based on real assets and long-term economic sustainability.

He also highlighted the potential of Islamic bonds (sukuk) for refinancing completed infrastructure projects and attracting additional capital from markets.