Islamic Versus Conventional Infrastructure Project Finance vis-à-vis Time-Overrun Issues

Amadou Thierno Diallo () and Ahmet Suayb Gundogdu ()
Additional contact information
Amadou Thierno Diallo: Islamic Development Bank
Ahmet Suayb Gundogdu: Islamic Development Bank

Chapter 2 in Sustainable Development and Infrastructure, 2021, pp 21-35 from Palgrave Macmillan

Abstract: Abstract: How different is Islamic project finance? Islamic finance checks and balances shape the way infrastructure is developed. In evaluating three MDBs (IsDB, ADB, and WB), even under conditions featuring the same project cycle, procurement guidelines, and collateral, the merits of Islamic finance emerge from disbursement procedures and manifest in the legal context. Islamic finance ensures fairness by correcting the imbalance found in conventional finance contracts, which favor lenders. Nevertheless, the same merit emanating from legal-financing agreements is also the root cause of time-overrun problems. Besides, Islamic Istisna contracts for infrastructure development make banks responsible for assets produced after project completion, and hence encourage observance of strong environmental and social safeguard measures. This feature of Istisna alone shows the embedded responsible financing feature in Islamic finance.

Keywords: Islamic finance; Project procurement; Project financial management; Project cycle; Istisna; Project finance (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:psibcp:978-3-030-67094-8_2

Ordering information: This item can be ordered from
http://www.palgrave.com/9783030670948

DOI: 10.1007/978-3-030-67094-8_2

Access Statistics for this chapter

More chapters in Palgrave Studies in Islamic Banking, Finance and Economics from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().