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Islamic Development Bank to elect new president next week

[JAKARTA] The Islamic Development Bank (IDB) will elect a new president next week during its annual meeting to be held in Jakarta, replacing long-serving president Ahmad Mohamed Ali, the Jeddah-based multilateral lender said late on Thursday.

Saudi Arabia, the IDB's largest shareholder, has nominated former Haj Minister Bandar Hajjar for the post, whose candidacy was endorsed by the outgoing IDB president.

The incomer will have big shoes to fill: Mr Ali is widely regarded in the industry having led the AAA-rated IDB since 1975, overseeing expansion of its economic development activities across its 56 member countries.

During his tenure the IDB tripled its authorised capital to US$150 billion in 2013 and last year up-sized its flagship Islamic bonds (sukuk) issuance programme to US$25 billion.

The nomination of Bandar Hajjar could be a test for Iran, the IDB's third largest shareholder, as Tehran and Riyadh trade blame over a failure to agree on organizational details for the annual haj pilgrimage to Saudi Arabia.

Earlier this month, Mr Hajjar was replaced by Mohammed Bintin as head of the Haj Ministry, as part of a wider reshuffle of key economic posts by Saudi Arabia's King Salman.

Despite this, the IDB has traditionally remained above regional politics, building a track record of activities across the Muslim world.

Energy, transportation, and water and sanitation projects make up about 60 per cent of the portfolio of the IDB, which also sets up and manages funds in accordance with sharia principles.

In 2014, the IDB launched an infrastructure fund with backing from Saudi Arabia, Bahrain and Brunei aiming to raise US$2 billion. That same year it seeded an aircraft leasing fund alongside European planemaker Airbus Group.

The IDB is also coordinating with Turkey and Indonesia to setup an Islamic infrastructure institution.

REUTERS