Khalafalla: Islamic finance effective for energy and infrastructure projects

Islamic finance is well suited for projects in the energy, water, renewable energy, and other infrastructure sectors due to its focus on real assets and long-term economic value, Khalid Khalafalla, Chief Executive Officer of the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) and Acting Chief Executive Officer of the Islamic Corporation for the Development of the Private Sector (ICD), said at a session during the annual meeting of the Islamic Development Bank Group (IsDB) in Baku, Report informs.

According to him, the structure of Islamic and conventional financial instruments cannot be considered an obstacle to the implementation of large projects.

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

He noted that the main work of investors and lenders is related to risk assessment, the economic model of a project, its sustainability, and its long-term attractiveness for all participants.

According to the head of the ICIEC, Islamic financial instruments are particularly in demand in projects constructing power plants, water supply facilities, grid infrastructure, and renewable energy sources, as they are based on the financing of real assets.