Nikolai Podguzov, Chairman of the EDB Management Board, and Muhammad Al Jasser, Chairman of the Islamic Development Bank, discuss the development of Islamic finance in Central Asia
Marrakech, Marocco. 12 October 2023. Nikolai Podguzov, Chairman of the Eurasian Development Bank’s (EDB) Management Board, and Muhammad Al Jasser, Chairman of the Islamic Development Bank (IDB), discussed cooperation in the countries where both institutions operate (Kazakhstan, the Kyrgyz Republic and Tajikistan), including the advancement of Islamic finance in Central Asia. The meeting took place on the sidelines of the Annual Meetings of the World Bank Group and the International Monetary Fund that are taking place from 9 to 15 October in Marrakech, Morocco.
The financial institutions have a positive experience of cooperation in Kazakhstan, where they jointly participated in funding the construction of the Big Almaty Ring Road (BAKAD).
Presently, the IDB supports the development of Islamic finance instruments at the EDB. The demand for financing with the use of Islamic banking instruments has been growing every year. In light of this, the EDB is considering issuing Sukuk bonds worth US $500 million in international markets in 2024 to finance projects in Central Asia.
Conventional lending instruments (primarily investment and project finance) account for more than 80% of the EDB’s portfolio in its member economies. By 2026, the Bank expects to achieve greater diversification in its portfolio in terms of financial instruments employed. In addition, the Bank recognises a demand for an expanded array of funding sources, including Islamic finance.
All Central Asian governments pay special attention to the development of Islamic finance. Some countries have enacted legislation to establish the relevant finance segments such as banking and leasing. The Kyrgyz Republic has a rapidly growing microfinance sector. Overall, at the end of 2021, Islamic assets represented 0.2% of total banking assets in Kazakhstan, 1.5% in the Kyrgyz Republic and 1.1% in Tajikistan. The EDB estimates that the potential size of Islamic finance assets in Central Asia could reach up to US $10 billion by 2030–2035.
The Eurasian Development Bank (EDB) is an international financial institution investing in Eurasia. For more than 17 years, the Bank has worked to strengthen and expand economic ties and foster comprehensive development in its member countries. The EDB's charter capital totals US $7 billion. Its portfolio consists principally of projects with an integration effect in transport infrastructure, digital systems, green energy, agriculture, manufacturing, and mechanical engineering. The Bank’s operations are guided by the UN Sustainable Development Goals and ESG principles.
Eurasian Development Bank
+7 (727) 244 40 44, ext. 6147
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