The Islamic Development Bank (IDB) and the World Bank are set to launch a new infrastructure fund that will target investments in the Middle East and North Africa (Mena) region.

The development banks are in advanced stage discussions on the launch of the fund and a consultant has been selected by the World Bank.

The size of the fund is yet to be decided but will likely stand at about $500m. Companies working in infrastructure and based in Mena countries will be considered for investment.

The IDB and World Bank define the Mena region in the same terms with one exception. The World Bank considers Iran to be part of Mena and would allow companies in Iran to be eligible for consideration by the fund, while the IDB defines Iran as an Asian country.

The fund will follow an Islamic structure and investments will only be made in companies that have Shariah-compliant activity representing at least 70 per cent of their balance sheet.

According to IDB infrastructure director Walid Abdelwahab, this aspect may constrain the size of the fund as there are a finite number of companies that meet such requirements in existence.

A meeting will be held between the IDB, the World Bank and Egypt’s Minister of Investment, Mahmoud Mohieldin on 24 March in Cairo.