The Islamic Corporation for the Development of the Private Sector (ICD), the private sector arm of Islamic Development Bank (IDB) Group, and CNBM International Engineering Co. (CNBM-IE) signed a memorandum of understanding (MoU) recently.
It aims at conceptualizing, developing and structuring a global scheme for the development of social infrastructure projects in ICD’s 52 member countries.
Under the scheme, a public-private-partnership (PPP) mode of development called “design-finance-build-lease-transfer” (DFBLT) will be utilized in order to meet the funding gap.
Khaled Al-Aboodi, CEO and general manager of ICD, and Li Xuhui, vice president of CNBM-IE, signed the MoU on behalf of the two organizations in Beijing.
ICD noted that social infrastructure needs such as building of schools, clinics, and adequate housing in its member countries is huge, and the heightened levels of fiscal stress in some countries are making it challenging for governments to mobilize resources.
The cost of these projects is estimated to exceed $50 billion in the next five years.
Under the early stages of the proposed DFBLT scheme, ICD will lead the global marketing and financing-arrangement activities, while CNBM-IE will conduct all engineering, procurement and construction management (EPCM) activities.
It is envisaged that development financial institutions and donor countries including the industry players in the member countries will play a major role in the success of this scheme.
During the signing ceremony, Al-Aboodi commented: “Utilizing PPPs as a way of developing local private sector capabilities through joint ventures with reputable international firms such as CNBM-IE will not only be ideal for our member countries given the current economic circumstances, but it will also create opportunities for sub-contracting local firms and will result in improved operational efficiency.”
Al-Aboodi said: “We look forward to a successful working relationship with CNBM-IE, who we believe have the relevant expertise and engineering solutions for social infrastructure.”
Li Xuhui added: “This MoU will encourage a collaborative approach in tackling the pressing issues of social infrastructure in growth areas, and I am convinced that this partnership between CNBM-IE and ICD, a respectable multilateral financial institution, will be fruitful.”
CNBM-IE is a member company of CNBM Group of China which is a Fortune Global 500 Company, one of the largest global cement producers with 13 world-class national R&D institutes.
CNBM-IE has delivered 30 International EPC projects within last 10 years.