IsDB and World Bank partner on green projects: Saudi-based Islamic Development Bank (IsDB) has partnered with the World Bank to help finance climate-centered water, energy, and food projects in the MENA region by 2026, according to a statement. The partnership aims to support joint operations that could rack up to USD 6 bn in financing through 2026, the statement notes. The World Bank’s political-risk ins. arm Multilateral Investment Guarantee Agency (Miga) will collaborate with the IsDB to mitigate political risk, while another World Bank member, the International Finance Corporation, will work with IsDB to draw in more private sector investment for the bank.

REMEMBER- Political risk is one of the highest barriers to climate-financing: Political (or country) risk was one of three factors that multilateral banks have been urged to reassess and reduce to incentivize developing countries to seek out affordable loans for climate-related projects. The other two risk barriers are exchange rate risk and off-take risks, which also add a premium to the cost of capital and create a high barrier to climate finance, making borrowing for climate projects more expensive.

IsDB is getting on board the energy transition train: IsDB signed a financing agreement with the government of Tajikistan in August to improve water management for the country’s agriculture sector, only a few months after it said it was earmarking USD 403 mn for three sustainable energy and transport projects in Egypt, Kyrgyzstan, and Tajikistan. The bank issued a total of USD 5.1 bn between 2017 and the first half of 2022 in green and sustainable sukuks. The IsDB is committed to a climate finance target of 35% of total financial commitment by 2025, according to a joint report (pdf) by the world’s biggest multilateral lenders.