How a Multilateral Bank Uses Islamic Finance to Build Global Infrastructure
Headquartered in Jeddah, the Islamic Development Bank operates as a unique multilateral financial institution. With 57 member states, it leverages Islamic finance principles to fund infrastructure, alleviate poverty, and foster economic cooperation. From building bridges in Mali to providing scholarships, the bank has become a powerhouse of specialized development assistance.
Established in 1973 by finance ministers during the first Organisation of the Islamic Conference, the Islamic Development Bank (IsDB) officially began operations on 3 April 1975. The institution was founded with the backing of King Faisal of Saudi Arabia, who remains the bank's largest single shareholder, holding approximately one quarter of its paid-up capital. Ahmed Mohammed Ali Al-Madani served as the inaugural president for four decades, leading the organization until 2015.
The bank's financial scale is significant; in May 2013, it tripled its authorized capital to $150 billion to expand its reach to Muslim communities in both member and non-member nations. Its financial stability is recognized globally, holding AAA credit ratings from major agencies including Standard & Poor's, Moody's, and Fitch. Membership is contingent upon belonging to the Organisation of Islamic Cooperation, contributing to the bank's capital, and adhering to terms set by the Board of Governors.
Beyond simple lending, the IsDB has evolved into a group of five specialized entities, including the Islamic Development Bank Institute and the International Islamic Trade Finance Corporation. These groups manage diverse activities ranging from direct equity investment and insurance for export credit to technical capacity-building and research in Islamic economics. A practical example of this impact is the Gao Bridge in Mali, which replaced an unreliable ferry system to connect the isolated Gao Region to the national heartland, demonstrating how the bank's infrastructure projects directly facilitate trade and regional integration.
Source: Islamic Development Bank
