UNDP Contributes to Dialogue on the Role of Islamic Finance in Accelerating Energy Investment at Afghanistan Energy Week

Kabul, Afghanistan | November 2026

The United Nations Development Programme (UNDP) highlighted how innovative financing solutions can help expand access to reliable energy for communities, entrepreneurs, and small businesses across Afghanistan while addressing the country’s energy financing gap during 2026 Afghanistan Energy Week, held on 9-10 November 2026 in Kabul under the theme “From Energy Dialogue to Delivery.” The event brought together government institutions, private-sector actors, investors, financial institutions, development partners, academia, and local communities to explore practical pathways for advancing sustainable energy solutions across the country. Alongside the thematic sessions, the 2026 Event featured a Private Sector and Industrial Exhibition, bringing together 13 businesses, including women-owned and women-led enterprises, to showcase energy technologies, local products, technical services, innovative business models, and community-based energy solutions.

Representing UNDP’s ICPSD, Dr. Muniruddeen Lallmahomood, Islamic Finance Portfolio Lead, participated as a panelist in the session “Powering Progress: IFI Engagement, Priorities, and Prospects,” alongside representatives from the International Finance Corporation (IFC), the World Bank, and the Islamic Development Bank (IsDB).

During the discussion, Dr. Lallmahomood emphasized how the experience of the Global Islamic Finance and Impact Investing Platform (GIFIIP) can be adapted and replicated to mobilize capital for renewable energy, decentralized energy systems, and energy access initiatives in Afghanistan.

“Afghanistan’s energy transition requires innovative financing solutions capable of attracting both domestic and international capital while remaining aligned with local values and market realities,” said Dr. Lallmahomood. “Islamic finance offers a practical and scalable pathway to mobilize investment in energy solutions that can improve livelihoods, create jobs, support local businesses, and expand access to reliable electricity for underserved communities.”

• Drawing on lessons from GIFIIP’s experience across developing and emerging markets, UNDP outlined several opportunities for replication in Afghanistan:
• Development of Thematic Sukuk (e.g., Green and Sustainability Sukuk) to finance renewable energy infrastructure such as solar parks, mini-grids, micro-hydropower projects, and energy-efficiency investments.
• Blended finance structures combining donor funding, concessional finance, guarantees, and private-sector capital to improve the bankability of energy projects.
• Impact investment platforms capable of aggregating small and medium-sized energy investments into investable portfolios attractive to institutional investors.
• Islamic social finance instruments, including zakat, waqf, and qard al-hasan-based models, to support community-level energy access, productive-use energy initiatives, and SMEs in underserved communities.
• Private-sector engagement mechanisms that enable local financial institutions, energy developers, and entrepreneurs to participate more actively in financing and delivering renewable energy solutions.

The discussion emphasized that despite abundant solar, wind, and hydropower resources, many energy projects in Afghanistan struggle to move beyond the planning stage due to limited access to long-term financing and investment. By leveraging Islamic finance principles, risk-sharing arrangements, and sustainable finance instruments, stakeholders can help channel capital toward viable energy projects while supporting economic growth, job creation, and climate resilience.

The event’s broader objective was to strengthen partnerships, facilitate investment opportunities, and identify practical financing solutions to accelerate renewable energy development in Afghanistan. Participants also explored mechanisms for increasing private-sector engagement and advancing innovative financing approaches, including blended finance, guarantees, and risk-sharing instruments.

Increased access to reliable energy can have far-reaching impacts on people’s daily lives, from supporting small businesses and agricultural activities to improving service delivery in schools and health facilities. Participants emphasized that innovative financing solutions will be critical to translating Afghanistan’s renewable energy potential into tangible development outcomes for communities across the country.