The corporation, established five years ago to finance private sector projects, intends to grow at the rate of 25 percent. “We’re still a growing organization and hope to double our profits in 2005,” he said, adding that the corporation’s 50-member staff will also increase by 20 percent.

Since the IDB finances government projects in all Islamic-member countries, the bank established the corporation to finance private sector projects. “IDB funded 50 percent of our $500 million capital, and the rest came from member-countries directly (30 percent), and through their financial institutions (20 percent).”

The Jeddah-based corporation operates in almost all the countries of the Middle East, except Oman where it is yet to ratify the agreement. It has extended its operations in CIS countries, Africa and the Far East, said Soliman, a native of Egypt who has an extensive experience in both public and private sectors.

He emphasized that the corporation was a commercial establishment to provide private sector finance to all Islamic countries. “We’re basically in banking and are providing long-term finance to private sector projects,” he said, adding that the corporation has so far financed 47 projects totally valued at $2 billion. “However, not all of it is from us,” Soliman hastened to add. “We believe in the Arabic dictum: ‘No one hand can clap’! So far each dollar we raise, we’re able to raise seven additional dollars from somebody else. This includes, of course, the money raised through project shareholders and the money we syndicate from other banks and institutions. ”This is the reason, the corporation has been able to succeed in such a short time, the secret being it works with a big network of banks and national institutions. “We don’t want to work alone, especially today when the concept of Islamic work is under lot of pressure.

We’re operating today with the International Finance Corporation (IFC), the private sector arm of the World Bank just like we’re the private sector arm of the IDB, which is chaired by Dr. Ahmad Mohamed Ali,” he said. “We also work in cooperation with OPEC Fund for Economic Development, Kuwait-based Arab Fund for Social and Economic Development, and the Saudi Fund for Development. We’ve a network of other financial institutions that we cooperate with,” said Soliman, who had a checkered career in academia followed by a four-year stint with the World Bank and another eight years with an investment bank in Cairo. He also performed an advisory role in the Kingdom for four years and was undersecretary for the Ministry of Economy in Egypt for nine years.

The corporation operates in five fields of specialization. In the health care sector, it has financed three hospitals — Saudi German Hospital in Madinah, a hospital in Yemen and a medical education center in Ajman — and two pharmaceutical companies that include Jamjoom Pharma in the Kingdom and the Jordan Pharmaceutical Company in Jordan. In the latter project, they were able to turn around the company. ICD provided technical assistance that enabled JPM to realize substantial projects.

In IT and communications, the corporation has financed five projects, including Sudan’s Sudatel, Yemen’s mobile phone company Sabaphone, Syrian mobile company called Spacetel and Thuraya Satellite, aside from an IT company in Dubai called Injazat Fund.

In the field of industry, it has financed a number of industrial projects, and in the oil service sector it has financed companies in the UAE, Kazakhstan, and Sudan. It has also helped in the creation of projects in the financial sector including a bank in Sudan and other projects in Azerbaijan, Lebanon and Mauritania.

ICD offers a wide variety of financial products and services from which its clients can choose. This enables ICD to offer a mix of financing that is tailored to meet the needs of each project. Its products include equity participation and direct financing, lines of financing, asset management, structured finance, and advisory services. It has also laid down eligibility criteria and project types eligible for financing. These include Greenfield projects that refer to investment/financing of start-up companies/projects, which will have some impact on the economy as a whole, expansion of projects, existing projects under restructuring and rehabilitation, and privatization operations.

ICD’s Shariah compatible modes of financing include leasing (Ijara), installment sale (Bai Ajel), manufacturing contract (Istisna’a), future contract (Bai Salam), equity, and quasi-equity. Under a leasing agreement, ICD buys capital goods and gives the beneficiary usufruct rights for a period of time against payment of fixed periodical rentals. Under an installment sale, ICD buys capital goods and resells them to the beneficiary at a price agreed by the two parties. The repayment is made through consecutive installments, and also considers a grace period. Sale contract or Istisna’a is a contract whereby ICD agrees to manufacture/acquire an asset, based on a specific order received from a client, and then, once manufactured, sells the said asset through installments to the client for an agreed price.

Equity is the purest form of Islamic financing where ICD shares the project’s risks and benefits. Under quasi-equity arrangements, ICD considers providing a term financing facility that can be later converted under certain conditions into equity at some stage of the project life.