Development of infrastructure is one of the main catalysts for economic growth, but funding mega-projects is one of the main issues for most developing countries. Traditional debt-based financing more often than not equals economic instability, increased debt obligations, as well as vulnerability to currency fluctuations—especially for financially limited countries. In this article, we propose alternative financing arrangements with specific focus on Islamic finance instruments like sukuk. We conclude that Shariah-compliant financing structures like Istisna-Mudarabah Sukuk offer a credible alternative to conventional debt by tying financial obligations to physical assets and incorporating risk-sharing mechanisms. Our research invites governments, policymakers, and institutional investors to give Islamic financial instruments serious consideration in their infrastructure plans. By leveraging the synergies between Islamic capital markets and ethical investment principles, this can result in more sustainable and inclusive financial systems in emerging markets.