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The Islamic Development Bank Group

Together We Build a Better FutureSeminar on Business Opportunities offered by IDB organized by TUSIAD

Istanbul, Turkey

(30th April 2010)

Islamic Development Bank Group

IDB Group Present and Future

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ContentsVision 1440H (2020) Structure Products and Services Portfolio and Activity Highlights IDB Group Reform Cooperation with other Institutions

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Vision 1440H (2020)

“ By the Year 1440H (2020) IDB shall have become a world-class development bank, inspired by Islamic principles, that has helped significantly transform the landscape of comprehensive human development in the Muslim world and helped restore its dignity.”

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Mission Statement

Source: AHDR

“We are committed to

alleviating poverty, promoting

human development, science

& technology, and Islamic

banking & finance, and

enhancing cooperation among

member countries, in

collaboration with

development partners”

Agenda for the Future: Responding to the Development Challenge of the Ummah (The IDB Vision 1440H & OIC 10 Year Plan of Action)

Source: AHDR

Achieving healthy human development

Securing strong and sustainable economic growth

Promoting good governance

Strengthening peace and stability

Fostering a powerful sense of common identity, consciousness, and empathy

Restoring the Image of Islam and the Muslim world

The Strategic Challenges Confronting the Muslim World:

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Human Development

Agriculture Development and Food Security

Infrastructure Development

Intra-trade Among Member Countries

Private Sector Development

Research and Development in Islamic Economics, Banking and Finance

IDB: Six Priority Areas

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Reforming IDB

Improving the Image of the Muslim WorldFacilitating integration of IDB MCs Economies

Universalizing Education Empowering Women

Alleviating Poverty Promoting Health

Expanding Islamic Financial Industry Prospering the People

Key Strategic Thrusts

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Key Elements of IDB Group 2020 Vision

A Vision for Comprehensive Human Development

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IDB Group

Islamic Development Bank

(IDB)

Islamic Research & Training Institute

(IRTI)

International Islamic Trade

Financing Corporation (ITFC)

Islamic Corporation for

the Development of the Private Sector (ICD)

Islamic Corporation for Insurance of

Investment & Export Credit (ICIEC)

IDB Group Organizational Structure

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• Established in 1975 to foster socio-economic development in member countries and Muslim communities in compliance with Shari’ah.• Authorized capital of US$ 45 billion

• Subscribed capital of US$ 22 billion

• Paid-up capital of US$ 5.3 billion• AAA rating by Moody’s Investors Service, Fitch

Ratings, Standard & Poors.• Zero-Risk Rating by the European Parliament

Islamic Development Bank (IDB)

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IDBPreside

nt

BOARD OF GOVERNORS

BOARD OF EXECUTIVE DIRECTORS

IDB Organizational Structure

VP(Fin.)

Chief

Econ.

VP(Opr.)

VP(CorpServ.)

Group Internal Audit

Group Strategic Planning

Group Risk Management

World Waqf Foundation

Group Integrity Officer

General Council

Group Ombudsman

Group Operations Evaluation

Group Shari’ah Board

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IDB Regional Offices

In addition, there are currently 12 Field Representatives in some

countries

Regional

Offices

Almaty Kazakhst

an

Kuala Lumpur, Malaysia

Dakar, Senegal

Rabat, Morocco

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Growth in IDB Membership

• 22 countries in 1975 → 56 countries in 2009

• A Unique Model of South-South Cooperation

Africa: 27

Asia: 26Europe: 2

Latin America: 1

• 56 members spreading over 4 continents

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Shareholders in IDB

(As % of Subscribed Capital)

Saudi Arabia; 24.44

Libya; 9.81

Iran; 8.58

Qatar; 8.61Egypt; 8.48

Turkey; 7.73

UAE; 6.94

Kuwait; 6.54

Algeria; 3.05

Pakistan; 3.05

Indonesia; 2.7

Others; 10.07

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IDB Group Products and Services

Financing of Projects (Public and Private) Promoting the Islamic Financial Industry Trade Finance and Promotion Capacity Building and Technical

Cooperation Risk Insurance Research and Training Fund/ Assets Management

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IDB Group Special Activities

NGOs and Women-In-Development (WID) Scholarship Programs Science & Technology Program Investment Promotion Technical

Assistance Program (ITAP) Trade Cooperation & Promotion Program

(TCPP) Special Assistance

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IDB Group Special Programs (1)

Technical Cooperation Program (TCP) Capacity Development (exchange of experts, training, etc.) Supporting civil societies through NGOs Supporting women-in-development initiatives

Investment Promotion Technical Assistance Program (ITAP) Promote Intra-Investment among OIC MCs Capacity Building of Investment Promotion Agencies Dissemination of Investment opportunities Investment Information Network Intra-Investment Statistics on MCs

Trade Cooperation & Promotion Program (TCPP) Exhibitions, Trade Fairs and Buyers-sellers Meetings Capacity Building of Export Promotion Agencies Consultative Meeting on Aid-for-Trade Promote regional Cooperation

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- Special Assistance and Scholarships• Provide Relief & Alleviation of suffering in case of

natural disasters• Support development of Muslim minorities in non-MCs• Scholarships for Muslim communities in non-MCs.• M.Sc Program for the Least Developed Member

Countries• Merit Scholarship Programs for High Technology

- Science and Technology Program• Capacity development in areas of Science and

Technology• Inter-Islamic S&T Network• IDB Prize for Science & Technology to Promote

Excellence in Research & Development• Self Reliance in Vaccine Production

IDB Group Special Programs (2)

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Interest-Free Loan Leasing Installment Sale Construction Finance (Istisna’a) Equity Line of Financing Technical Assistance (Loan & Grant) Murabaha (Trade Financing)

Modes of Financing

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Net Approved Financing IDB Group(Since Inception to End 2009)

Type of Operation US$ billion

1 -Development Projects 28.14

2 -Technical Assistance 0.29

3 -Trade Operations 34.78

4 -Special Assistance 0.68

TOTAL 63.90

Approved IDB Group Financing (Since Inception to End 2009) US$ billion

Net Cum. End 2009 = US$ 63.90 billion

Projects, $ 28.14 bn,

(44%)

Technical Assistance, $ 0.29 bn, (1%)

Trade, $ 34.78 bn, (54%)

Special Assistance, $ 0.7 bn, (1%)

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Cumulative Sectoral Distribution (Projects & TAs from OCR)

Energy/ Public Utilities (32%)

Transport & Communic. (24%)

Social Sectors (17%)

Industry (11%)

Agriculture (9%)

Other Sectors (7%)

IDB Cooperation Turkey/ Albania and

Central Asia Countries

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Projects IDB/Central Asia Countries and Albania

Countries Number of Projects Amount

Albania 23 181.08

Azerbaijan 26 423.90

Kazakhstan 24 446.71

Kyrgyz 23 111.38

Tajikistan 34 174.66

Turkey 76 990.46

Turkmenistan 12 459.99

Uzbekistan 18 278.05

Total 236 3,066.24

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IDB projects in Turkey

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IDB projects in Turkey

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Project Sector Total cost

IDB financing

YALOVA AND BOLU SEWERAGE SEWERAGE INCL.STORM WTR DRAINAIGE,WASTE TRMT

73.45 45.07

YALOVA AND BOLU SEWERAGE SEWERAGE INCL.STORM WTR DRAINAIGE,WASTE TRMT

73.45 6.53

RAILWAY TRACKS LAND TRANSPORT: ROADS,HIGHWAYS,RAILWAYS

366.18 153.64

THE ELECTRIC LOCOMOTIVES LAND TRANSPORT: ROADS,HIGHWAYS,RAILWAYS

389.00 220.00

THE ENHANCING ORGANIC FARMING

AGRICULTURAL AND LIVESTOCK PRODUCTION

0.36 0.29

SYRIA-TURKEY INTER-REGIONAL CO OPERATION PROGRAM (STICP)

General finance 21.00 0.50

DEVELOPMENT BANK OF TURKEY (DBT)

NDFIs/IFS / NDFI 40.00 40.00

Projects under implementationTurkey

Business Opportunities

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How to Learn AboutBusiness Opportunities?

• Business Opportunities Bulletin on IDB Approved Projects: published after each BED meeting

• Procurement Notices: published on IDB website (www.isdb.org), international newspapers, national gazettes and distributed to Embassies & Consulates of MCs

• In some cases : Procurement notices published on DG Market website (www.dgmarket.com/)

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Active IDB Operations

Offering

Business Opportunities

EnergyCountry Project Total cost

(in US$)IDB financing

(in US$AZERBAIJAN

KHACHMAZ ELECTRIC SUBSTATION AND TRANSMISSION LINE

16.78 13.51

AZERBAIJAN

MINGECHAUR HYDRO POWER PROJECT (PHASE-II)

105.00 80.00

AZERBAIJAN

JANUB POWER PLANT 956.03 201.53

KYRGYZ

110 KV AIGUL TASH TO SAMAT TRANSMISSION LINE SUBSTATION

13.72 11.99

TAJIKISTAN

POWER REHABILITATION PROJECT 62.44 9.29

TAJIKISTAN

MINI HYDROPOWER PLANTS IN THE RURAL AREAS

11.59 9.18

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EnergyTAJIKISTAN

REGIONAL POWER TRANSMISSION INTERCONNECTION PROJECT

50.00 10.00

UZBEKISTAN

500 KV SYRDARYA - SOGDIANA TRANSMISSION LINE

42.56 15.85

UZBEKISTAN

500 KV SYRDARYA - SOGDIANA TRANSMISSION LINE

42.56 9.24

UZBEKISTAN

500 KV GUZAR-SURKHAN TRANSMIS SION LINE SUBSTATIONS

128.40 42.00

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TransportationCountry Project

Total cost (in US$) IDB financing

(in US$ALBANIA

CONSTRUCTION OF BUNA BRIDGE 9.55 8.57

ALBANIA

DURRES-MORINE ROAD 47.19 10.00

ALBANIA

DURRES-MORINE ROAD (KALIMASH- REXHEPAJ SECTION)

47.19 30.00

ALBANIA

RECONSTRUCTION OF SECONDARY LOCAL ROADS

44.00 30.00

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TransportationALBANIA

RECONSTRUCTION OF SECONDARY LOCAL ROADS

44.00 10.00

AZERBAIJAN

RECONSTRUCTION OF UJAR-YEVLAKH ROAD. 31.05 22.00

AZERBAIJAN

RECONSTRUCTION OF YEVLAKH TO GANJA ROAD

28.00 10.40

KAZAKHSTAN

RECONST. OF 58 KM ROAD SECTION OF SOUTH-OBLAST-TARAZ

195.40 170.00

KAZAKHSTAN

REHABILITATION MODERNIZATION OF BARTOGAY WATER RESERVOIR

0.44 0.31

KYRGYZ

RECONSTRUCTION OF TARAZ-TALAS SUUSAMYR ROAD

10.95 9.15

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TransportationKYRGYZ

RECONSTRUC. OF OSH-IRKESHTAM ROAD 19.80 17.30

TAJIKISTAN

KULYAB-KALAIKHUM ROAD 92.90 20.00

KYRGYZ

TARAZ-TALAS-SUSAMYR ROAD (PHASE II) 12.77 11.20

KYRGYZ

RECONSTRUCTION OF BISHKEK-TORU GART ROAD 69.25 16.95

TAJIKISTAN

CONSTRUCTION OF SHAGON-ZIGAR ROAD, PHASE (II)

15.90 13.77

TURKMENISTAN

BEREKET-ETREK-TURKMENISTAN-IRA N BORDER RAILWAY (1431H)

1,414.61 189.90

TURKMENISTAN

BEREKET-ETREK-TURKMENISTAN-IRA N BORDER RAILWAY_(1432H)

1,414.61 181.30

UZBEKISTAN

ROAD CONSTRUCTION AND MAINTENANCE EQUIPMENT

14.99 12.56

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HEALTH

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Country Project Total cost (in US$)

IDB financing

(in US$

ALBANIA

DURRES GENERAL HOSPITAL PHASE-II PROJECT

8.22 7.05

ALBANIA

KAVAJA GENERAL HOSPITAL 8.76 5.69

TAJIKISTAN

CONSTRUCTION AND EQUIPPING OF DANGARA GENERAL HOSPITAL

17.23 10.51

TURKMENISTAN

ARCHMAN MEDICAL HYDROTHERAPY CENTER

18.81 10.38

UZBEKISTAN

STATE MEDICAL EMERGENCY HOSPITALS (SMEH) EQUIPMENT

29.30 23.80

Agriculture and Rural Development

Country Project Total cost (in US$)

IDB financing

(in US$ALBANIA CONSTRUCTION OF

DURRES FISHING PORT 10.05 8.77

AZERBAIJAN SAMUR ABSHERON IRRIGATION VELVELICHAY-TAKHTAKORPU CANAL

42.60 10.10

KYRGYZ MICROFINANCE PROJECT FOR RURAL AREAS

10.05 5.00

KAZAKHSTAN KAZAGROFINANCE LINE OF FINANCING

30.00 30.00

KAZAKHSTAN NURBAK LINE OF FINANCING

10.00 10.00

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Agriculture & Rural Development

KYRGYZ

REPLENISHMENT OF FOOD SECURITY STOCKS-PHASE I JED DECLARATION

0.70 0.70

KYRGYZ

MICROFINANCE PROJECT FOR RURAL AREAS 10.05 0.30

TAJIKISTAN

MICROFINANCE PROJECT FOR RURAL AREAS 20.08 0.33

KYRGYZ

PRODUCTION OF IMPROVED SEEDS OF WHEAT (JED. DECARATION)

0.40 0.40

TAJIKISTAN

DANGARA VALLEY IRRIGATION NETWORK (PHASE II)

30.48 13.17

TAJIKISTAN

PRODUCTION OF IMPROVED SEEDS O F WHEAT (JED. DECLARATION)

0.40 0.40

TAJIKISTAN

MICROFINANCE PROJECT FOR RURAL AREAS 20.08 10.00

TAJIKISTAN

REPLENISHMENT OF FOOD SECURITY STOCKS-PHASE I JED DECLARATION

1.00 1.00

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Agriculture and Rural Development

UZBEKISTAN

IRRIGATION DRAINAGE NETWORK IN DJIZZAKH SYRDARIA REGIONS

93.21 52.65

UZBEKISTAN

GLOBAL LINE OF FINANCING TO THREE BANKS FOR SMES

15.00 15.00

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INDUSTRY AND MINING Country Project Total cost

(in US$)

IDB financing

(in US$KAZAKHSTAN

ESTABLISHMENT OF A LAB. FOR HALAL CERTIFICATION OF FOOD

0.48 0.32

TURKMENISTAN

PROCUREMENT OF TWO NEW OIL TANKERS 32.00 31.00

TURKMENISTAN

F.S. OF SILICON PRODUCTION FROM KARAKUM SAND

0.33 0.30

UZBEKISTAN

THE NATIONAL BANK OF UZBEKISTAN 15.00 15.00

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FINANCE Country Project Total cost

(in US$)IDB financing

(in US$KYRGYZ

DEVELOPMENT OF ISLAMIC FINANCI AL SERVICES INDUSTRY

0.21 0.19

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EDUCATION Country Project

Total cost (in US$)

IDB financing (in US$)

TAJIKISTAN

RECONSTRUCTION OF SECONDARY SCHOOLS PHASE II

13.02 10.55

UZBEKISTAN

CONSTRUCTION AND EQUIPPING OF VOCATIONAL COLLEGES

12.75 10.50

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WATER, SANITATION & WASTE MGMT

Country Project Total cost (in US$)

IDB financing (in US$

ALBANIA

THE WATER SUPPLY SANITATION IN ORIKUM 16.44 13.35

AZERBAIJAN

STRENGTHENING THE CAPACITY OF THE MINISTRY OF ECONOMIC DEV.

0.39 0.26

AZERBAIJAN

STRENGTHENING THE CAPACITY OF THE CABINET OF MINISTERS

0.38 0.32

TAJIKISTAN

DUSHANBE WATER SUPPLY 10.70 9.30

UZBEKISTAN

TASHKENT SEWERAGE PROJECT 38.84 35.37

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IDB Procedures

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Selection of Contractors

Predominantly, three methods:

1) ICB/MC: ICB limited to Member Countries for several projects.

e.g.: Paved roads, Rural and gravel roads, Bridges, Sewerage lines, etc

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Selection of Contractors

2) ICB: “Open” ICB, not enough qualified companies in member countries, Category B projects

e.g.: Viaducts, Railways, Tunnels, Oil refineries, Major power plants, etc.

3) NCB: Projects not likely to attract foreign competition.

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Selection of Contractors

Other methods

- International or National Shopping.- Direct Contracting.- Force Account.- Community Participation.

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Selection of Consultants

• Predominantly Short-list of Member Country firms.

. Exceptional cases

Short-list of non-member country firms.

Procurement Trends

“IDB considers that as a matter of priority, goods and works it is financing, should be procured to the extent possible from its member countries”. And even if the case of open ICB, there is still a provision for a margin of preference of up to 15 percent for contractors from member countries.

60 % of the Bank financed contracts for goods/works in recent years, awarded to contractors from member countries.

95 % for consultancy services.

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IDB does Encourage Contractors from Member Countries…

• ICB/MC: ICB limited to Member Countries projects.

• ICB: margin of preference up to15% for MC, goods and works.

However: - Prior consent of beneficiary/IDB. - Stated in bidding documents.

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Mechanisms of Control

• Short-list of non-member countries only on exceptional cases.

• IDB promotes the transfer of technology by encouraging the participation of domestic firms.

• Registration of member countries firms or organizations in the Data base of consultants so that the IDB can consider them for short listing for IDB financed projects.

Mechanisms of Control

• Legal Framework - Financial Agreement - Guidelines for procurement of

goods and works - Guidelines for the use of

Consultants - standard documents

Mechanisms of Control

Precautionary Measures

Preliminary approval for all the process of procurement (bidding documents, bid evaluation report, draft contracts..)

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Control Mechanisms in Procurement

Measures in case of misprocurement - Violation of Agreed procedures of

the Financial Agreement; - Terms and conditions of the contract

are not satisfactory to IDB. Cancellation of portion of financing

allocated to the concerned operation.

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Control Mechanisms in Procurement

• Measures in case of Corruption or Fraud, • IDB : - will reject a proposal of award; - ask the beneficiary country to take

appropriate action to rescind the contract, failing which;

- cancel the portion of financing allocated to the concerned operation;

- will declare the firm ineligible.55

Contents

Vision 1440H (2020) Structure Products and Services Portfolio and Activity Highlights IDB Group Reform

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IDB Reform Aspirations

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Finance Focused Development Focused

Infrastructure Centric People Centric Traditional Economic Innovation & Knowledge Development Programs Intensive Economic Dev

Follow Lead (Facilitate)

Internal Driven Partnership

Output Oriented Impact Oriented

FROM TO

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Proposed Reform: Repositioning IDB Group

Results Oriented

FocusedLeveraging Partnerships

Knowledge-Oriented

Responsive to Clients

A New IDB Group

Scaled up

Islamic Development Bank Group

A Strategic Partner for

Development

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Thank you