Arab Petroleum Investments Corporation (APICORP), the Middle East and North Africa (MENA) region’s multilateral development financial institution, has signed a $125 million 5-year Shariah-compliant corporate facility with the leading Saudi Arabian power company ACWA Power, to support its future growth pipeline.
The agreement is in line with APICORP and ACWA Power’s common goal of enhancing the energy transition in the MENA region and globally by increasing the dependency on green technologies, which currently comprise over 15 percent of APICORP’s financing portfolio.
The Shariah-compliant facility has been agreed upon for funding ACWA Power’s investments in renewable energy projects in the countries it operates in, as well as in future high-growth markets. The five-year tenor is perfect for financing projects in the initial stage to provide high financial support in the early development phase.
The APICORP facility can also be used as a revolver loan during the initial 3-year period, whereby it could be settled and redrawn as per the liquidity requirements of ACWA Power which allows the company to recycle capital and increase financial capacity for further portfolio development.
“Backing the sustainable development of the Arab energy sector through innovative financing solutions continues to be a strategic priority for APICORP. Worldwide and across the MENA region, we are witnessing a concerted drive to accelerate the share of renewables in the energy mix through the adoption of innovative, low-carbon technologies and solutions. This agreement further cements our longstanding and fruitful partnership with ACWA Power to build a renewable, more sustainable energy future.”
Commenting on the agreement Kashif Rana, Chief Financial Officer of ACWA stated that, “APICORP’s $125 million facilities will serve as an important funding source to support the agile and robust expansion of ACWA Power’s ‘green’ portfolio across markets. The revolving feature of this facility offers ACWA Power the flexibility to reallocate and thus optimize its utilization.”
Last October, APICORP provided a $70.5 million worth of financial support to ACWA Power and other co-sponsors to develop Phase V of the Mohammed bin Rashid Al Maktoum Solar Park in Dubai, UAE, the world’s largest single-site solar park.