DAMAM: The Arab Petroleum Investments Corporation (APICORP) Monday announced the establishment of a $3 billion sukuk program.

Initiating the sukuk program marks a strategic step for APICORP, rated Aa3 by Moody’s, in becoming a regular issuer of sukuk in global markets and will position the company’s credit alongside its multilateral development bank peers.

APICORP’s Chairman Aabed A. Al-Saadoun said: “We are delighted to have established this sukuk program which, in line with the recently approved corporate strategy, will allow APICORP to diversify its funding sources, reduce the overall cost of financing, extend the company’s debt maturity profile, and enhance our access to a diverse set of global investors.”

Al-Saadoun said: “The lower financing costs that APICORP is expecting to secure after this new program will enhance its ability to foster the development mandate of the hydrocarbon and energy related sectors in Arab countries.”

“This will be done by firstly enabling APICORP to extend attractive financing terms to its clients and partners alike, and secondly enhancing APICORP’s ability to participate in financing some strategic energy related projects that may not attract the commercial banks from either a return or tenor perspective.”

He added: “APICORP could issue its first sukuk later this year, subject to prevailing market conditions, as part of its new $ 3 billion program. It is expected that this program will support the efforts to deepen the international sukuk markets by offering Shariah-compliant investors’ access to high-quality sovereigns, and supra nationals and agencies (SSA) assets.”

Standard Chartered Bank is acting as sole arranger for APICORP’s program, which will be listed on the Irish Stock Exchange and rated by Moody’s Investor Services.

APICORP is a multilateral development bank created and owned by the governments of the 10 member states of the Organization of Arab Petroleum Exporting Countries (OAPEC).

APICORP’s mission is to meaningfully contribute to the ongoing development of the Arab oil and gas sector, and the region’s energy sector more generally, through the provision of financial solutions, such as equity investments and loans, and research.

The company seeks to make appropriate financial returns on the services it provides to the energy industry.