The Arab Petroleum Investments Corporation (APICORP), a multilateral impact financial institution focused on the MENA energy sector, is embarking on a transformative journey with its visionary 2023-2028 strategy and a new name, signaling a redesigned business approach focused on long-term growth and impact. This strategic shift includes a planned investment of up to US $1 billion over the next five years towards advancing energy transition with a focus on decarbonization and related technologies, announced during COP 28.
The institution's rebrand as The Arab Energy Fund, aligns with its deep commitment to playing an active role in supporting the MENA's energy landscape transition towards a net-zero future. This evolved strategy represents the institution's natural progression as a pioneering impact investor, with focused verticals for investing in the energy sector including decarbonization and related technologies as a key vertical, effectively balancing energy security and sustainability.
Aligned with this strategy, the institution will rebalance its overall portfolio with continued loan growth and an enhanced focus on equity investments while continuing to innovate to expand its range of financing and direct equity solutions and expert advisory services.
During COP 28, where The Arab Energy Fund is showcasing its role as a climate supporter in the Green Zone's Energy Transition Hub, Khalid Ali Al-Ruwaigh, CEO of The Arab Energy Fund, unveiled the new name and strategy.
He remarked: "APICORP's (now known as The Arab Energy Fund) transformative strategy marks the institution's next chapter, deeply rooted in our 50-year legacy and our distinctive role in the MENA energy sector. It 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. Our strategy involves diversifying investments by championing technological advancements for enhanced energy efficiencies and driving sustained decarbonization efforts. Additionally, we are extending our investment scope beyond the core value chain, actively cultivating and shaping value chains within the region."
He added: "Our new strategy and name signify not only our dedication to empowering the region's energy ecosystem but also resonate with our mission to create a meaningful impact by promoting economic growth, boosting local value chains and local content, through skill development, and fostering knowledge creation."
Following the establishment of its green bond framework in 2021, the institution set a precedent in sustainable finance by issuing the first-ever green bond issuance by an energy-focused financial institution in the MENA region. The US-denominated five-year benchmark issuance raised an impressive US $750 million, over US $610 million of which has already been allocated to 11 projects in the region.
Currently, 18% of the institution's US $4.5 billion existing loan portfolio, is dedicated to supporting environmentally and socially responsible initiatives, fostering collaboration between the public and private sectors, and pioneering a path toward more sustainable financing.
The Arab Energy Fund is also in the process of enhancing its ESG Policy Framework, also introduced in 2021, demonstrating the institution's strong commitment to incorporating responsible business practices into its operations. This effort reflects the institution's leadership in shaping a more sustainable and responsible future for all.
As the MENA region's only multilateral impact financial institution, The Arab Energy Fund is also committed to backing the 2050 net zero commitments made by its member countries. The institution has publicly affirmed the imperative need for collective climate action to align with the significant goals laid out in the UN Paris Agreement.
In line with this commitment, the institution introduced several innovative financial solutions that are considered regional firsts, including its pioneering US $75 million Murabaha facility for voluntary carbon offsets and financing of distributed power portfolios.
The Arab Energy Fund stands among the highest-rated financial institutions in the MENA region, boasting 'AA' rating from Fitch, alongside 'Aa2' from Moody's and 'AA-' from S&P. This strong endorsement from the rating agencies and the robust regional support from member countries, along with substantial backing from the region's energy ministries, underpinned by strong liquidity and credit profiles, positions the institution as a key player in championing a pragmatic and sustainable energy future.
