BAKU, Azerbaijan, June 30. The official visit of the Chairman of the Islamic Development Bank (IsDB) Group, Muhammad Al Jasser, to Kazakhstan from June 30 through July 2, 2026, is significant not only in the context of bilateral cooperation but also in terms of the growing regional relevance of Islamic finance as a development instrument.
One indication of this trend was the IsDB Group Annual Meetings held in Baku from June 16 through 19, 2026, one of the largest international events dedicated to Islamic finance. Such platforms are increasingly serving as venues for discussions on infrastructure development, sustainable growth, and new approaches to capital mobilization.
Kazakhstan occupies a prominent position in this context owing to the scale of its economy, its investment attractiveness, and its role as one of the region’s largest infrastructure markets. As a result, the current stage of cooperation with Islamic financial institutions may prove significant not only for Kazakhstan but also as a reference point for broader regional development. Kazakhstan became a member of the Islamic Development Bank (IsDB) on November 30, 1995. The country is also a member of the Islamic Corporation for the Development of the Private Sector (ICD) and the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC).
The IsDB delegation conducted an official visit to Kazakhstan from 30 June through 4 July 2025 with the aim of strengthening cooperation in sustainable water resources management and infrastructure development. In 2024, Kazakhstan and IsDB signed an agreement to launch Phase 1 of the Climate-Resilient Water Resources Development Project. The initiative, valued at $1.32 billion, of which $1.15 billion is financed by IsDB, is aimed at modernizing Kazakhstan’s water infrastructure and enhancing its resilience to the impacts of climate change.
During the Annual Meetings and the Eurasian Development Bank business forum in Almaty, IsDB representative and Islamic finance specialist Yahya Rehman stated that the bank sees significant opportunities for attracting Islamic financing into infrastructure projects in Kazakhstan.
According to Rehman, the key factor is technical assistance — the creation of an enabling environment, the development of competencies, and the coordination of efforts between international development institutions.
Financing is no longer viewed as a standalone instrument; instead, it becomes part of a comprehensive model in which capital is accompanied by institutional reforms, workforce training, digital solutions, and the development of project expertise.
It is noteworthy that this approach is also beginning to take institutional form at the regional level. In May 2026, the Eurasian Development Bank (EDB) and the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) signed a memorandum of understanding to develop Islamic finance in Central Asia. The parties agreed to jointly develop financial products, promote capacity building among relevant institutions and specialists, and improve standards of Islamic finance. At the same time, the document закрепed the EDB’s role as AAOIFI’s regional partner in Central Asia.
This is important not so much as another agreement, but as a signal of a shift from isolated investment initiatives toward the formation of a fully-fledged market infrastructure — with unified approaches, expertise, and mechanisms for scaling projects.
For Kazakhstan, Islamic finance can become an additional channel for attracting capital for infrastructure and project needs. The use of these instruments allows the country to expand access to long-term capital directed toward sectors with long investment cycles, such as water resource management, the development of transport corridors, and the modernization of engineering infrastructure.
Coordination of efforts between Islamic financial institutions and regional development banks makes it possible to optimize resource allocation, avoid duplication of projects, and implement integrated approaches, including digitalization and the transfer of modern management technologies. Islamic finance instruments can become a practical complement to Kazakhstan’s national economic policy.
