Innovative Islamic banking approaches to develop clean energy projects

Department of Islamic Banking, Zarqa University, Zarqa, Jordan

^* Corresponding author: a.almajali@zu.edu.jo

Abstract

The article is devoted to innovative approaches of Islamic banking in supporting and financing clean energy projects. In the context of global challenges related to climate change and the need to transition to sustainable energy sources, Islamic banking is an important tool for the implementation of environmentally friendly and cost-effective projects. Islamic financial principles, such as the prohibition of interest, uncertainty and gambling, provide a special financing model that can be effectively applied to the implementation of renewable energy projects. Key Islamic financial instruments, such as ijara, mudaraba and mursala, provide opportunities for sustainable investments in solar, wind and hydropower projects, as well as other environmentally friendly technologies. The article structures examples of successful application of Islamic financial instruments in the clean energy sector, analyzes the potential benefits and challenges faced by Islamic financial institutions when investing in environmental projects. The main findings highlight the need for further development of Islamic banking to support the global transition to sustainable energy sources, as well as the role of Islamic finance in combating climate change and ensuring a sustainable energy future for all countries.