The Arab Petroleum Investments Corporation (APICORP) and the Saudi-based Islamic Development Bank (IsDB) have launched ‘Infra Initiative’, a $1 billion private sector-focused infrastructure financing initiative.
The initiative will finance strategic utility projects that contribute to human and economic development in the two multilateral financial institutions’ member countries and their respective national development strategies.
The two institutions will jointly identify and deliver structured finance facilities to utility projects with limited access to international financing. Funds will be allocated to electricity generation and transmission projects that utilize renewable energy or natural gas, as well as water and waste management facilities. The involvement of the private sector at the local, regional, and international levels will also be a priority in the project selection process.
APICORP and IsDB plan to solve low private sector participation in energy project funding by stimulating public-private partnerships (PPP) to bridge the estimated $200 billion investment gap in such projects in Organization of Islamic Cooperation (OIC) member countries through this program.
“We recognize that quality infrastructure is key to economic and social development. Hence, addressing the infrastructure needs of our member countries is one of the IsDB’s foremost priorities. Our cooperation with APICORP on the Infra Initiative is in this spirit. It is intended to amplify our impact by combining our two institutions’ resources, skill sets and market knowledge. It also supports our respective commitments to the Sustainable Development Goals (SDGs).“
The initiative also attempts to tap into other sources of funding, including commercial banks, other multilateral development banks, development agencies, and the capital markets. According to APICORP’s 2021-2025 Mena Energy Investment Outlook, the share of private investments in regional energy projects is set to reach 27 percent by 2025, a threefold increase from the 8.5 percent in the 2020-2024 outlook.
Dr Ahmed Ali Attiga, CEO of APICORP, said that “Increasing private sector investments in the energy sector is a key area of focus for us as part of our strategy to fund the energy transition in the Arab region. It is an objective we shared with our partner, IsDB.“
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