Malaysia on Thursday called for a US$10 billion (RM38 billion) Islamic bond issue to fund infrastructure projects to spur economic growth in less-developed Muslim countries.

"A sum of US$10 billion (RM38 billion) will be a decent amount to look forward to. I am sure the infrastructure bond will receive a good response," Malaysia's second finance minister Nor Mohamed Yakcop told reporters.

Nor Mohamed said Malaysia would support the Islamic bond - debt that complies with the Koran's ban on paying or receiving interest.

"We hope it will take off quickly," he said on the sidelines of the two-day meeting of the Islamic Development Bank (IDB), the lending arm of the world's biggest Muslim grouping, the Organisation of Islamic Conference (OIC).

For major projects

In an opening speech to the meeting Thursday, Malaysian Prime Minister Abdullah Ahmad Badawi, who is chairperson of the 57-member OIC, also urged the bloc to establish an infrastructure bond.

"For infrastructure financing alone, it is estimated that the IDB members will require about US$741 billion over the next 10 years," he said.

Abdullah suggested that the central banks of OIC countries contribute to the bond fund and that the proceeds be used for major projects in member nations.