Islamic Finance Integration With Project Finance

The Islamic finance industry continues its growth path, with Islamic finance assets expected to rise to US$3.69 trillion, displaying an upward trend from US$2.88 trillion in 2019 (' The Growing Global Appeal of Islamic Finance' (bnymellon.com). The increasing Islamic finance investment appetite has led to innovative practices in the project financing space, where parties have sought to finance projects, at least in part, in accordance with Islamic finance principles. MUNIB HUSSAIN and NOOR MARAGHI delve further.

Conventional project finance structures had been developed in western Riba-based financial systems and, as a result, had not previously contemplated compliance with the principles of Shariah. The integration of conventional project finance structures with Islamic finance-based facilities has been made possible through a reassessment of risk allocation and thoughtful structuring considerations, including in relation to intercreditor matters, where the