The World Bank, along with the Islamic Development Bank, is set up a regional initiative to raise up to $1 billion to close the existing infrastructure gap in the Middle East and North Africa (MENA) region.
According to the World Bank, the MENA region needs to invest between $75 billion and $100 billion a year to sustain the growth rates that the region has achieved in the past few years and to boost economic competitiveness.
There is very limited private sector investment in infrastructure in MENA countries despite huge unmet demands for infrastructure services, the World Bank said in a statement.
By setting up an initiative directed solely towards the MENA region, both the Islamic Development Bank and International Financial Corporation (IFC), the private sector arm of the World Bank, aim to explore ways of providing both conventional and Shariah-compliant project finance.
“This regional initiative will unlock new flows of private sector investment to help countries like Egypt, Morocco, Jordan or Tunisia eager to push ahead with critical infrastructure projects that will drive competitiveness and boost much needed job creation,” said Robert B. Zoellick, president of the World Bank.
The regional initiative is also expected to help governments in the MENA region tackle legal, policy and institutional constraints to public-private-partnerships and develop cross-border infrastructure projects.
IFC, a World Bank unit, focuses on the private sector in developing countries. It has so far invested a total of $18 billion in 2010.