IsDB sets up concessional financing fund to support least developed nations: Exec

Muhammed Sulaiman Al-Jasser, President of the Islamic Development Bank (IsDB) and Group Chairman, says the new fund's launch shall expand the scope of the bank's concessional financing to near 15% of its annual approvals

Muhammed Sulaiman Al-Jasser, President of the Islamic Development Bank (IsDB) and Group Chairman, said the launch of the IsDB Concessional Fund (ICF) reflects the bank’s commitment to supporting and accelerating sustainable development efforts across its 27 least developed member countries (LDMCs).

This is in response to the mounting challenges facing LDMCs, including elevated leveraging, economic fragility, and the repercussions of climate change, Al-Jasser told Argaam.

He affirmed that the fund aims to expand the scope of IsDB’s concessional financing to reach approximately 15% of its annual approvals. This shall be achieved by strengthening partnerships and activating co-financing mechanisms, thereby maximizing the developmental impact of available resources.

ICF, according to Al-Jasser, builds on the bank’s development experience that extends to more than five decades and offers a simplified model of Shariah-compliant concessional financing. This will help ease debt burdens and direct resources toward high-impact development investments, particularly in human capital, food security, essential infrastructure, and strengthening resilience to climate shocks.

He also noted that the fund aligns with the IsDB Group’s 10-year strategic framework for 2026-2035, adopting an objective resource allocation methodology that factors in key indicators such as per capita income, debt sustainability, levels of fragility, and exposure to external shocks.

ICF is built on sustainable financial foundation. Key funding sources include an allocation of 20% of IsDB’s annual net income, supplemented by periodic voluntary contributions from member countries to ensure long-term effectiveness, according to the top executive.

Additionally, Al-Jasser praised the pivotal role of Saudi Arabia as the founding and host country of IsDB Group, noting that the Kingdom’s continued support over more than five decades has been a key pillar in enabling the bank to fulfill its development mission and strengthen its international standing.

He also commended the financial and moral support provided by Saudi Arabia and Kuwait, which had a direct impact on the establishment and launch of the ICF.

The fund reflects IsDB’s commitment to supporting its least developed member countries in addressing development challenges and continuing to invest in their potential, contributing to building a more sustainable and inclusive future, Al-Jasser concluded.