Islamic Project Finance

Abstract Islamic finance is concerned with the conduct of commercial and financial activities in accordance with Islamic law. Structuring the investment of such capital, therefore, requires a comprehensive understanding of Islamic finance principles, knowledge of international and domestic laws, and documenting such arrangements in a manner that satisfies the priorities of all the project participants, including those not necessarily constrained by Islamic finance principles. This chapter analyses how these priorities are accommodated and how Islamic finance techniques are applied in project financings. It begins with a discussion of the sources of Islamic finance. This is followed by a brief analysis of the principles and financing techniques that underpin Islamic finance. Then, it assesses how Islamic project finance techniques are utilized in practice, including how such arrangements are documented.