The agreement was inked in a Memorandum of Understanding signed by representatives of both institutions on Monday.

The finance will be invested in African and Middle Eastern countries, particularly fragile countries where financing will be used for job creation and growth, infrastructure development, support for climate action and to develop technology and innovation.

In addition to the joint operation co-financing, which spans a five-year period, the MoU further pledges to strengthen cooperation between the two development banks.

During the conference, the IsDB announced the creation of a sustainable finance framework to use funds for green projects in countries where its members are located. The framework aims to catalyse the role of the bank’s Sukuk bond. According to the Luxembourg government, the Sukuk will be the first of its kind in Europe following the inaugural global green Sukuk launched in Malaysia in 2017.

“The Sukuk will be issued to reflect the IsDB’s ambitions to help leverage greater funds from capital markets into specifically green development projects by unlocking the necessary funds though Islamic financing, a method that places great importance on improving the quality of life, social equity and fair-trade relations and; forbids profiteering at the expense of others, or investment in businesses that damage society,” the government said in a press release.

Speaking at Monday’s summit, finance minister Pierre Gramegna (DP) said that Luxembourg and the IsDB shared “the same goals: to act as catalysts in global efforts to move the necessary investments in sustainable development and climate projects from billions to trillions.”