Apicorp to invest $1 billion in decarbonisation

Multilateral lender unveils new plan after rebranding as Arab Energy Fund

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The Arab Petroleum Investments Corporation, a mutilateral lender focused on the energy sector, aims to invest $1 billion in decarbonisation and related technology over the next five years as it rebrands as the Arab Energy Fund.

The company also unveiled a new strategy, which is aligned with its commitment to playing an active role in supporting the Middle East and North Africa region’s energy transition towards a net-zero future, it said at Cop28 on Monday.

It will rebalance its portfolio with loan growth and an enhanced focus on equity investment, it said in a statement.

The new strategy “highlights our commitment to impact-driven solutions, leveraging our deep industry expertise and regional access to enable the evolving energy landscape towards a net-zero world”, Khalid Ali Al Ruwaigh, chief executive of Arab Energy Fund, said.

“Our strategy involves diversifying investments by championing technological advancements for enhanced energy efficiencies and driving sustained decarbonisation efforts … we are extending our investment scope beyond the core value chain, actively cultivating and shaping value chains within the region.”

The multilateral lender is owned by 10 members of the Organisation of Arab Petroleum Exporting Countries – Saudi Arabia, UAE, Kuwait, Libya, Iraq, Qatar, Algeria, Bahrain, Egypt and Syria.

It was established in 1975 to extend financial support to Arab countries in the energy sector.

Its investment portfolio increased to $1.3 billion for the January-June period, from $1.2 billion, with the successful exit from Ashtead Technology, a provider of technologically advanced subsea solutions, tools and systems to the construction and maintenance of offshore energy infrastructure.

In September, it reported its highest first-half profit yet while its operating income grew as interest rates rose.

Its total comprehensive income in the six months to the end of June rose by 87 per cent year-on-year to $108.7 million.

Following the establishment of its green bond framework in 2021, the company marked the issuance of the first green bond by an energy-focused financial institution in the Mena region.

The US dollar-denominated five-year benchmark issuance raised $750 million, more than $610 million of which has already been allocated to 11 projects in the region.

Currently, 18 per cent of its $4.5 billion existing loan portfolio is dedicated to supporting environmentally and socially responsible projects.

Updated: December 04, 2023, 1:26 PM