Apicorp allocates $335m to green projects

The Arab Petroleum Investments Corporation (Apicorp), a Saudi Arabia-based multilateral lender owned by the 10 members of the Organisation of Arab Petroleum Exporting Countries, has allocated $335 million to fund green projects after it raised $750 million through a green bond in 2021.

As of the end of October last year, it financed 10 projects in Saudi Arabia, the UAE, Egypt, Jordan, and Spain. The remaining $415 million was invested into other green assets including securities and funds which comply with the green bond framework, Apicorp said in a statement on Wednesday.

The financed projects include solar and wind farms, waste-to-energy plants and wastewater treatment facilities. Collectively, the projects produce 9.4 Terawatt-hour (TWh) of clean power for nearly 1 million homes while avoiding more than 20 million tonnes of carbon dioxide equivalent per year.

“We strongly believe that green bonds are an important tool for supporting the transition to a more sustainable and low-carbon economy,” Khalid Al Ruwaigh, chief executive of Apicorp, said.

“By providing a dedicated source of funding for these types of projects, green bonds can help to attract private sector investments and encourage the development of a more sustainable and resilient economy in the Mena region.”

The demand for green financing in the Middle East and North Africa region is increasing as countries focus on developing renewable energy projects to cut greenhouse gas emissions.

Total GCC green and sustainable bond and sukuk issuances last year reached $8.5 billion from 15 deals, compared with $605 million from six deals in 2021, data from Bloomberg’s Capital Markets League Tables showed.

Saudi Arabia was the leading issuer within the region, accounting for more than half of the total volume, with the UAE contributing to the remaining issue volume.

Abu Dhabi’s clean energy company Masdar also plans to raise money through the issuance of a green bond this year to finance its projects.

Masdar will publish its first green finance framework “in the coming weeks”, chief executive Mohamed Al Ramahi told the Abu Dhabi Sustainable Finance Forum last month.

The UAE has already committed $163 billion to reach net zero by 2050, while Saudi Arabia has pledged about $180 billion to meet its target by 2060.

Saudi Arabia’s sovereign wealth fund, the Public Investment Fund also raised $3 billion through its inaugural green bond last year to finance or refinance its environment-friendly investments.

The global green bond market is projected to surpass $5 trillion by 2025, driven by increasing demand for sustainable investment options and a growing awareness of the need to address climate change challenges, according to Apicorp.