In a significant move to accelerate sustainable development, the Islamic Development Bank (IsDB) has launched the IsDB Concessional Fund (ICF). The landmark initiative was unveiled at the Second AlUla Conference for Emerging Market Economies in the Kingdom of Saudi Arabia, marking a major evolution in the Bank’s strategy to support its 27 least developed member countries (LDMCs).
A New Framework for Concessional Financing
Building on five decades of development work, the ICF introduces a streamlined model for enhanced financing that is fully aligned with the IsDB Group’s Ten-Year Strategic Framework (2026-2035). The fund is designed to alleviate significant debt burdens while catalysing high-impact investments in critical sectors.
The ICF will deploy Shariah-compliant instruments, including various concessional financing modes and targeted grants for fragile contexts, to fund projects focused on human capital, food security, essential infrastructure, and climate resilience.
Targeted Impact and Allocation
Resources from the ICF will be allocated through a rigorous, evidence-based framework that prioritizes countries with the most acute needs. This evaluation process considers key indicators such as per capita income, debt sustainability, and exposure to fragility and external shocks. This ensures that funding is directed towards LDMCs facing the most severe vulnerabilities, supporting initiatives that align directly with their national development strategies.
To ensure its long-term viability, the ICF is backed by robust financial measures, including a 20% allocation of the Bank’s annual net income and periodic replenishments from member countries.
A Pledge to Inclusive Progress
“The ICF is more than just a financing window; it is a renewed vow that the world’s most vulnerable will not face their struggles alone,” said His Excellency Dr. Muhammad Al Jasser, Chairman of the IsDB Group, during the launch in AlUla.
Dr. Al Jasser affirmed that the Fund aims to triple the IsDB’s concessional financing to approximately 15 percent of the Bank’s annual approvals. This will be achieved by “fostering partnerships, sharing knowledge, and unlocking co-financing that multiplies the impact of every dollar invested.”
He also emphasized the crucial financial and moral support provided by the Kingdom of Saudi Arabia and Kuwait in the establishment of the fund. “The IsDB Concessional Fund is a declaration of hope and a pledge to stand by our least developed member countries. We are here to invest in their potential and help them build a resilient, inclusive future,” he stated.
About the Islamic Development Bank
The Islamic Development Bank (IsDB) is a multilateral development bank (MDB) that works to promote social and economic development in its member countries and Muslim communities worldwide. Headquartered in Jeddah, Saudi Arabia, the IsDB finances projects and programs that are consistent with Shariah principles. Its core mission is to foster sustainable development, alleviate poverty, and promote economic cooperation among its member nations.
Source: Zawya
