The government has signed five agreements with the Islamic Development Bank (IDB) worth a total of US$45m. The agreements were signed by the minister of finance, Abdou Kolley, in Saudi Arabia in October. The IDB is a multilateral institution with 56 member countries. It lends money in keeping with Islamic usury principles, which forbids it from charging interest. Most of its loans are for infrastructure projects in predominantly Muslim countries. The projects are as follows:

• a US$15.6m loan for the development of the University of The Gambia;
• a US$15.9m loan for community-based infrastructure and a livelihood improvement project;
• a US$400,000 technical assistance grant for community-based infrastructure and livelihood improvement;
• US$8m for heavy and light fuel products for the National Water and Electricity Company (Nawec); and
• US$5m for electricity- and water-metering equipment, and spare parts for Nawec.

It is unclear how much of the US$45m represents new financing and how much is just a repackaging of deals previously announced. For example, the loan for the university was revealed in mid-2010 (July 2010, Foreign trade and payments). Nevertheless, at US$45m, the size of the agreements is significant for a small country like The Gambia and shows that, despite revoking ties with Iran, its diplomatic relations with the Islamic world will remain a key source of finance.

In addition to these commitments, the IDB is reportedly funding the construction of a new power station by Nawec in Brikama. Baba Fatajo, the director of power generation at Nawec, said that the project sought to improve rural electrification beyond the Greater Banjul area to the West Coast region. The new power plant was initially designed to provide 30 mw of power, but this has been cut to 9 mw owing to funding constraints. Despite this, its contribution will be notable; it is equivalent to about 15% of total installed capacity at present. Mr Fatajo told local reporters that an engineering, procurement and construction contract worth EUR11.5m (US$15.2m) had been awarded to an unnamed Finnish company. It is unclear when the power station is expected to be completed. An improvement in electricity supply is badly needed; around 80% of the country's energy needs are met by wood and charcoal, and the electricity grid remains concentrated in the Banjul area, and even there there are frequent power cuts owing to insufficient capacity.