چکیده:
This study is related to an Islamic project financing with a major focus on investigating the role of Islamic finance in financing infrastructural development projects (toll roads, power plants, airports, and plants, as well as natural resource exploitation projects, such as hydroelectric dams, mining projects, oil and gas assets, and paper mills), especially in the context of Pakistan. Infrastructural development being a significant indicator of stability and growth, most countries attempt to develop their infrastructure to a competitive level in their respective regions. Considering this critical aspect of economic development, Islamic project financing can be beneficial to developing economies like Pakistan as it would be able to compensate for a lack of domestic infrastructural development. New and innovative financial solutions are required to cater to the needs of infrastructural investment. Islamic project is an area which can open new channels for this purpose and this area is also under-explored. Islamic banks in Pakistan and across the globe need to be involved in huge infrastructural financing.1 However, their growth rate and efficiency is higher than in conventional financing. Focusing on this aspect, this research study is based on a review of project financing in Pakistan. The study portrayed the current scene of project financing in Pakistan, and investigated the involvement and challenges faced by Islamic modes of financing in infrastructural projects in Pakistan. Fourteen in depth interviews were conducted with public and private sector professionals to investigate the issues and prospects. The main challenges faced by Islamic financial institutions (IFIs) are a lack of regulation and investment avenues, and non-coherent standards and practices. However, these IFIs have opportunities with respect to the Islamic market and fund development.
خلاصه ماشینی:
Fida Department of Management Sciences, COMSATS Institute of Information Technology (CIIT) Islamabad, Pakistan (Received: 26 August; 2013; Revised: 5 May, 2014; Accepted: 18 May, 2014) Abstract This study is related to an Islamic project financing with a major focus on investigating the role of Islamic finance in financing infrastructural development projects (toll roads, power plants, airports, and plants, as well as natural resource exploitation projects, such as hydroelectric dams, mining projects, oil and gas assets, and paper mills), especially in the context of Pakistan.
Considering this critical aspect of economic development, Islamic project financing can be beneficial to developing economies like Pakistan as it would be able to compensate for a lack of domestic infrastructural development.
For many years Islamic finance has been the source of funding for Middle Eastern countries but in the last few years Islamic financial institutions (IFIs) have developed their product range to apply to project financing.
Islamic financial businesses are based on four main principles: materiality (there should be a real economic transaction), risk sharing (a risk return distribution for parties involved in it), no exploitation of any party in the financial transactions and no investment in the prohibited businesses mentioned before.
Literature Review Two basic principles are provided by Shariah in Islamic finance: risk sharing and promoting the welfare of the society (Ibrahim, 2008).
Before 1980s the focus was more on interest free financing and banking but in the mid-1980s these efforts shifted towards the development of Islamic financial institutions.
Different contracts and financial structures are used to finance industrial, natural, construction and infrastructural development (Wood, 1995) which is quite similar to Islamic financial contracts (Ebrahim, 1999).