RIYADH: Apicorp, the Arab multilateral energy investment bank, is planning to issue green bonds or sukuk as early as next year to support plans to grow its renewable energy assets by $1 billion by 2023.
The company, which recently finished an issuance of $750 million in green bonds, is traditionally known for its financing of oil, natural gas, and downstream projects. This deal was first reported in September.
#WATCH: The #UAE and #SaudiArabia constitutes a “large part” of @APICORP’s portfolio, its CEO @AAttiga told Arab News in an exclusive interview, hailing both countries’ fast #energy transition https://t.co/0vRpfyDu1W pic.twitter.com/PtfyCCnCbw
— Arab News (@arabnews) October 25, 2021
The Saudi Arabia-based bank is now becoming very aggressive in building a sustainable and renewable portfolio after it increased its funding for green projects by a staggering 500 percent over the last five years, Ahmed Ali Attiga, chief executive officer, told Arab News in an interview.
"Now we have around 15 percent of our total portfolio in green and non-conventional and renewable assets, up by 500 percent over the past five, six years," he added.
The bank posted net income of $115m on assets of $7.9bn, according to its 2020 financial statement.
It began trading in 1975 after being formed by the Organization of Arab Petroleum Exporting Countries.
Apicorp’s Attiga said he expected its member nations to look towards greener forms of energy and financing.
He said: “We are looking at all our member states. Actually, most of them have started on this journey of energy transition albeit with different degrees but we have Saudi Arabia and the United Arab Emirates that have done this quite fast.
“These two countries constitute a large part of our portfolio, we will definitely continue to look at them and to support them.
The Apicorp boss added: “For some of these countries however, the access to finance is available either through their own fiscal space or from banks, global and regional banks.
“If that's the case, we sometimes look at other opportunities, where access to finance is not that easy.”
“At the end of the day, Apicorp is a development bank. which means we always have to play an additional value-added role in what we do.”
On Saturday, Saudi Arabia’s Crown Prince Mohammed bin Salman said the Kingdom would aim to achieve net carbon neutrality by 2060, during a speech to the Saudi Green Initiative forum in Riyadh.
The Crown Prince said Saudi Arabia plans to reduce its carbon emissions by 278 million tons per year by 2030, with the adoption of the Carbon Circular Economy — based on zero waste — helping to reach the target.
The Kingdom will also join the Global Methane Pledge to contribute to cutting global methane emissions by 30 percent by 2030, as part of its commitment to deliver a cleaner, greener future.
Apicorp chief executive Attiga said the push towards net-zero targets would be a long, delicate process that had to make sure the world’s energy needs were catered for to avoid a power crisis.
He said: “Sometimes this momentum gives the impression that things can be done very quickly. In the forum, many speakers from the region highlighted this point, that this is a journey and that this is a long journey, and that this is a transition that means it doesn't happen overnight.
“This is a long term process, one that needs commitment, needs resources, that needs financing, that needs a combination, a balanced approach.
“It has to be progressive and fast, but also inclusive, that has to strike the right balance between energy security which the whole world needs.
“If it doesn't happen you'll have an energy crisis and you won't be able to have an energy transition. It’s all interrelated.”
In spite of its green plan, Apicorp still plans to issue sukuk, or bonds, as early as Spring 2022 to finance its conventional and non-conventional projects, he added.
Attiga explained that the company is both a lender and an investor, and that the assets under management by Apicorp in both equity and debt are around $8 billion.
“That’s both direct equity investments, lending to private and public projects and cooperations, and of course we have as an investment at the end of the day some treasury assets that also constitute part of our balance sheet,” he said.
“The equity part of our balance sheet stands at about $1 billion, and lending at around $4 billion,” he added.