STEMMING WATER-RELATED DEATHS IN SUB-SAHARAN AFRICA: THE PLACE OF ISLAMIC PROJECT FINANCE AND MALAYSIAN CONTRACTORS

Annually 3.5 million children under the age of 5 years die from water-related diseases, as reported by the World Health Organisation (WHO). The bulk of these deaths are in the developing countries of Asia, Latin America and Sub-Saharan Africa (SSA). Asia and Latin America have taken steps to stem the tide of these water-related deaths by investing heavily in water infrastructure through publicprivate partnerships (PPPs) or concession contracts to meet their Millennium Development Goals (MDGs). Studies, however, show that SSA is the only region that will not meet its MDG targets before 2015. Water-related diseases have led to productivity losses of over USD 28 billion annually in SSA. Although they have tried the PPP route, these projects have often been cancelled or become distressed due to affordability issues. Tariff levels are highly dependent on the source of financing, and the country risk profiles of SSA countries further add to the cost of capital. This article argues for the adoption of interest-free Islamic project finance (IPF) as a cheaper alternative to conventional project finance for water and sanitation in SSA. Arguments are also made in support of bundling such finance with Malaysian contractors as a complete package to enhance successful outcomes.