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$1.5bn IDB

fund set up to invest in Muslim

states: Qureshi

RECORDER REPORT

KARACHI: The Islamic Development Bank (IDB) has established Infrastructure Fund with $1.5 billion to invest in the Muslim countries including Pakistan.

This was announced by former caretaker prime minister, Moeen Qureshi and Fund Chief Executive Officer, Mumtaz Khan in a press conference on Saturday.

This is the largest Fund established specially for the development of infrastructure in the Muslim countries.

The Islamic Development Bank and thhe Darul-Maal-Islami of Saudi Arabia have already contributed $200 million each to the Fund.

"We believe that we will be able to gather more than the targeted $1.5 billion," said Qureshi.

The Fund office will be based in Bahrain.

Mumtaz Khan said that the Fund has got strong positive responses from the Muslim countries.

"Soon we will able to find more sponsors for it," said Mumtaz Khan.

It can make special equity investments in the eligible infrastructure projects in IDB member countries.

Generally, the Fund will make equity investment of between $10 million to $100 million per project.

The equity capital of the Fund is targeted to $1 billion. About half a billion dollars will be available for substitute of debts.

"The objective is to invest with the private sector. It will invest in sound and profitable commercial projects," explained Qureshi.

He also made it clear that the investment would be in accordance with the "Shariah".

It will consider investment in new infrastructure projects (i.e. greenfield projects), expansion of existing infrastructure companies and projects, restructure of existing companies and projects, privatisation and listed companies.

It may invest up to 20 percent of its equity capital in listed, infrastructure-related companies when particularly attractive opportunities arise.

"The Fund can invest up to 20 percent of the equity capital in any single member country, i.e. $200 million, for a Fund Equity of $1 billion," said Mumtaz.

In reply to a question, Moeen Qureshi explained why his own company did not invest in Pakistan while investing in China, Africa, India, etc.

"You need at least three basic requirements: "Easy permission for investment, predictability (what will be rate of return? etc.) and the government's dealing with the existing investment," said Qureshi and added that these were basic problems which prevented him to invest in Pakistan.

While referring to the case of independent power projects, Moeen Qureshi said that the new government had assured him that the controversy over IPPs would be over soon.

Talking about the recent decision of the Supreme Court regarding the interest-free economy, he said that Fund's invest would be in accordance with the Shariah "but the world is following trading investment."

Answering another question, Qureshi said that no country likes to go to the IMF and loose slightest independence "but you are at the corner, there is no option for you other than to approach IMF."

He said that the IMF team which is expected within days in Pakistan, would stress for its recovery and Pakistan needs money to return IMF's money.