The Arab Energy Fund, previously known as the Arab Petroleum Investments Corporation (APICORP), has announced a significant commitment of $1 billion to drive energy transition and decarbonization efforts. APICORP is wholly owned by the ten member states of the Organization of Arab Petroleum Exporting Countries (OAPEC).
The Organization of Arab Petroleum Exporting Countries is a multi-governmental organization headquartered in Kuwait which coordinates energy policies among oil-producing Arab nations. Member countries include Algeria, Bahrain, Egypt, Iraq, Kuwait, Libya, Qatar, Saudi Arabia, Syria, and the United Arab Emirates. (Egypt’s membership was suspended in 1979, but it was readmitted in 1989. Tunisia ceased to be a member in 1987.) The headquarters are in Kuwait.
This investment, revealed at COP28 in Dubai, is what the oil and gas companies say is part of a strategic shift towards environmentally and socially responsible initiatives, including technological advancements for enhanced energy efficiencies and developing new value chains in the region.
APICORP focused on the MENA energy sector 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. These could include hydrogen energy and storage breakthroughs and carbon sequestration technologies.
The Arab Energy Fund 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.
Khalid Ali Al-Ruwaigh, CEO of The Arab Energy Fund announced at COP28: “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.
The Arab Energy Fund – formerly the Arab Petroleum Investments Corporation (APICORP) – is a multilateral impact financial institution focused on the MENA energy sector established in 1974 by the ten Arab oil-exporting countries.
