Islamic Development Bank loans Indonesia $5.2 billion

The Islamic Development Bank (IDB) has announced a loan of $5.2 billion for Indonesia with the aim of helping the government pursue its energy and infrastructure goals during the 2016-2020 period.

The Jakarta Post reported Wednesday that Indonesia's finance minister, who also serves as IDB board of governors chairman, told the group's 41st annual meeting that the two sides had successfully completed their member country partnership strategy (MCPS) for the previous period.

"This success is expected not only to be replicated [in other areas], but also needs enhancement in the upcoming MCPS," Bambang Brodjonegoro said late Tuesday.

The meeting comes as the IDB, Indonesia and Turkey have expressed commitment to establishing an Islamic “megabank".

Turkish Deputy Prime Minister Mehmet Simsek, who represents the country at the Jakarta meeting, said last week that Ankara has requested the IDB to found such a facility in Turkey, while Indonesia has made a similar request.

During the gathering, Simsek gave speeches on regional and geo-political affairs at two panels.

On Wednesday, Simsek said that global and regional trends call for a change in the policy focus toward longer-term development issues and structural reforms in order to achieve sustainable and inclusive growth.

At a panel Tuesday, he spoke of Turkey's importance for the future of the energy sector, underlining the country's high potential on all fronts, including the production of energy and its transit to Europe.

The IDB was established on Dec. 7, 1973 by Organization of Islamic Cooperation members and officially started operating in Oct. 20, 1975. The bank aims to contribute to the social and economic development of member countries and Muslim communities individually in line with the principles of Islam.

It has provided finance worth more than $115 billion to member countries in total since starting operations, including $9.2 billion to Turkey for 459 projects.

Islamic finance entails interest-free transactions, in accordance with Islamic law.