IDB plans $500m fund to finance housing projects

Riyadh: The Saudi Arabian-based Islamic Development Bank (IDB) plans to start a $500 million (Dh1.8 billion) fund to provide financing for developers of affordable houses in Muslim countries, an executive at the bank said.

Khalid Al Aboudi, chief executive officer of the Islamic Development Bank's Islamic Corp for the Development of the Private Sector, said the fund would be started in the third quarter and by the end of the year at the latest.

The fund will invest only in the 56 member-countries of the Islamic Development Bank. In the early stages the fund will invest in 10 countries, and later it will expand into the rest of the bank's membership, he added.

Al Aboudi didn't specify which countries but said they are distributed between the Middle East, Africa, and Central Asia. "We have chosen the 10 countries carefully and we already identified a couple of projects that we will invest in," he added. "Once the fund is announced, work in the projects will commence."

Islamic Corp., known as ICD, is the seed-investor of the fund and it will contribute a small portion of its capital. The rest will come from private investors and governments, Al Aboudi said.