Islamic Project Finance

Abstract This chapter analyses the priorities of Islamic financial institutions in financings, and how Islamic finance techniques are applied in project financings. For those unfamiliar with Islamic finance, this chapter first introduces Islamic finance by considering the sources of Islamic finance, followed by an analysis of the principles and financing techniques that underpin Islamic finance. This background is intended to enable the reader to better understand the ensuing discussion of the issues that commonly arise in a project financing that is entirely or in-part financed with sharia’a-compliant funding, including istisna’a-ijarahand wakala-ijarah facilities, and project sukuk.Then, the focus is turned to assess how Islamic project finance techniques are utilized in practice, in particular, in the context of multi-sourced project financings.