Exclusive: Apicorp eyes three bond issuances for as much as $2.2bn

Lender reported nearly a threefold increase in its net profit for the first half of 2018

Apicorp is looking to issue more bonds to expand its energy portfolio. Getty

Arab Petroleum Investments Corporation (Apicorp) is preparing to issue three bonds in the range of $500 million to $750m each next year, as the group looks to expand its regional portfolio to include more renewables.

"We will continue utilising the $3 billion sukuk and going to the market for more on that and also the conventional [market]. Ballpark range of each issuance would be around $500m to $750m until we mobilise the full programme," said Apicorp chief executive Ahmed Attiga.

The multilateral development bank owned by the 10 members of the Organisation of Arab Petroleum Exporting Countries established the sukuk programme in 2015 to diversify its funding sources. The Dammam-headquartered lender will go ahead with one issuance from the sukuk programme, two from conventional and will also target smaller "bilateral issuances", said Mr Attiga.

Apicorp, which has interests in the regional energy industry, reported nearly a threefold increase in its net profit for the first half of 2018, buoyed by the better performances of its corporate finance and investment divisions. Net profit for the first half of the year surged to $150.3m from $41.8m in the year earlier period.

The bank successfully priced for a five-year US dollar denominated bond on Tuesday, which received significant interest from Asian investors, said Mr Attiga.

Apicorp, which raised 630m yuan (Dh347.6m) from its debut dim sum bond sale in March, was still interested in pools of Asian liquidity.

Net income for the lender nearly trebled, rising to $169.9m from $60m for the first half of the year, driven partly by its exit from Saudi-owned National Petroleum Services. Apicorp may target one more exit next year.

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“In 2019, possibly, one exit may materialise. Exits are always tricky and subject to considerations but in principle Apicorp will continue to look for good exits and use the proceeds to enter new investments and play different roles in our activities,” said Mr Attiga.

The collaborative bank, whose investments are largely parked in oil and gas, is looking to add more renewable components to its portfolio, mirroring the regional pivot towards greener energy.

Saudi Arabia, the world's biggest sovereign oil producer, accounting for 12.9 per cent of global crude output, is embarking on an ambitious programme to generate 9.5 gigawatts of renewables capacity by 2023. The drive, which was expected to see $7bn in investments into the sector this year alone, will free up more crude for export.

Apicorp is in talks to support private players looking to invest in the burgeoning Saudi renewables sector.

“Yes, we are in discussions and, what attracts us more is the fact that the private sector is being encouraged to do these investments,” said Mr Attiga.

Plans are also under way to deploy equity and debt to such projects regionally, with an emphasis on debt in particular to support government projects, with schemes in the works to also lend to the private sector.

“We will focus not only on [Arabian] Gulf countries but also importers of oil like Jordan, Egypt, Morocco, Tunisia. They all have ambitious plans for renewable energy,” he added.