Arab Energy Fund Unveils $1 Billion Decarbonization Plan for MENA Region

At the COP28 summit on Monday (4/12), the Arab Petroleum Investments Corporation (APICORP) announced its ambitious plan to invest $1 billion in decarbonization and related technologies over the next five years.

In line with this initiative, the multilateral lender, now rebranded as the Arab Energy Fund, unveiled a new strategy aimed at actively supporting the Middle East and North Africa (MENA) region's transition to a net-zero future.

The Arab Energy Fund outlined its strategy, emphasizing a commitment to impact-driven solutions and a focus on supporting the evolving energy landscape.

Khalid Ali Al Ruwaigh, Chief Executive of the Arab Energy Fund, stated, "Our strategy involves diversifying investments by championing technological advancements for enhanced energy efficiencies and driving sustained decarbonization efforts. We are extending our investment scope beyond the core value chain, actively cultivating and shaping value chains within the region."

As part of its redefined approach, the company plans to rebalance its portfolio by placing increased emphasis on equity investment alongside loan growth.

The Arab Energy Fund, owned by 10 members of the Organisation of Arab Petroleum Exporting Countries, including Saudi Arabia, UAE, Kuwait, and others, was initially established in 1975 to provide financial support to Arab countries in the energy sector.

The company's investment portfolio, which recorded a successful exit from Ashtead Technology during the January-June period, increased from $1.2 billion to $1.3 billion.

Notably, the Arab Energy Fund reported its highest first-half profit to date, with total comprehensive income rising by 87 percent year-on-year to $108.7 million.

In September, the fund marked a significant milestone by issuing the first green bond in the MENA region.

The US dollar-denominated five-year benchmark issuance raised $750 million, with over $610 million already allocated to 11 projects in the region.

Currently, 18 percent of the fund's $4.5 billion existing loan portfolio is dedicated to supporting environmentally and socially responsible projects.

The Arab Energy Fund's proactive approach reflects a commitment to driving positive change and sustainability in the region's energy sector.

Alkesh Sharma / The National