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Jeddah, 16 April 2025 – ISRA Institute had the opportunity to participate in the 12th Roundtable on Financing Water, co-organised by the Organisation for Economic Co-operation and Development (OECD) and the Islamic Development Bank (IsDB).
Themed “Strengthening the Sustainability of Water Investments: Alternative Financing Approaches and Models”, the Roundtable was held at the IsDB Headquarters in Jeddah, Saudi Arabia, in a hybrid format. The event was organised in collaboration with the Government of the Netherlands, the World Water Council, and the World Bank.
The Roundtable brings together the finance and water communities to share information on recent and future developments of common interest and identify novel ideas and solutions. It draws upon political leadership and technical expertise, with the ambition of facilitating increased financing of investments that contribute to water security and sustainable growth.
Dr Marjan Muhammad, Deputy President of Research at ISRA Institute, delivered a keynote address during the second session on the first day of the meeting. In her remarks, she emphasised that water was not merely a resource, but a right, a trust, and a public good. Therefore, financing water infrastructure and access aligned closely with the objectives of Maqasid Al-Shariah, particularly in preserving life, the environment, and wealth.
Dr Marjan acknowledged that while Islamic finance’s current contribution to water financing remained limited, the sector held vast liquidity and funding potential. Its asset-backed structure and emphasis on ethical, impact-driven investment — well-aligned with SDG and ESG goals — position Islamic finance as a strong enabler in this space.
She illustrated the use of various Islamic finance instruments such as Green and Blue sukuk, Islamic syndicated financing, Islamic endowment funds (waqf), zakat, and sadaqah. The session concluded with an engaging exchange of insights among panellists from the London Stock Exchange Group, Saadiq Standard Chartered, SEDCO Capital, and the OECD Environment Directorate.
The fourth session featured Assoc Prof Dr Maya Puspa Rahman, Director of the Research Management Centre at ISRA Institute, who shared her views on leveraging sukuk to finance water-related projects. She noted the strong demand for sukuk, with an outstanding market value exceeding USD900 billion, and proposed that earlier SRI sukuk issued by Air Selangor, Puncak Niaga Berhad, and Ideal Water Resources Sdn Bhd be reclassified as “water sukuk” to support more targeted and impactful initiatives in this space.
Dr Maya also highlighted key challenges, including cost management for issuers, the need for tax incentives and sovereign guarantees, the identification of suitable water assets for asset-backed structures, and balancing risk-adjusted returns with sustainability objectives to attract investors. The session included contributions from participants representing the IsDB Treasury Department, S&P Global Ratings, BNP Paribas, and CAF – Development Bank of Latin America.
In closing, Dr Maya called for greater research and innovation in water financing using Islamic finance instruments, encouraging collaboration with global research institutes to develop a robust and comprehensive framework.
