APICORP Partners with IFC to Co-finance Arab-owned Energy Projects in Developing Countries

29/03/2011 – APICORP Partners with IFC to Co-finance Arab-owned Energy Projects in Developing Countries

Signs Accession Agreement to IFC’s Master Cooperation Agreement

Dammam/Manama, March 28, 2011: In a move that widens its role as a multilateral development bank, the Arab Petroleum Investments Corporation (APICORP) today announced that it has signed the Accession Agreement to the International Finance Corporation’s (IFC) Master Cooperation Agreement (MCA). Apicorp is the first Arab multilateral development bank to sign IFC’s MCA Accession Agreement. The Agreement enables Apicorp to partner with IFC, a member of the World Bank Group, to co-finance developing country energy projects in which Arab countries have made investments. Apicorp is owned by the ten member states of the Organisation of Arab Petroleum Exporting Countries (OAPEC).

Current MCA signatories include the Belgian Investment Company for Developing Countries (BIO), France’s Société de Promotion et de Participation pour la Coopération Economique (Proparco); Germany’s Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG); the Developmental Bank of Japan (DBJ), the Netherland’s Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden N.V. (FMO) the OPEC Fund for International Development (OFID), the Black Sea Trade and Development Bank, Oesterreichische Entwicklungsbank AG (OeEB) and Eurasian Development Bank (EDB).

The Government of Egypt owns a 3% stake in APICORP. Over the last decade, Egypt has been one of Apicorp’s key target markets for investment and financing opportunities. Currently, Apicorp holds equity stakes in five Egypt-based companies including Oriental Petrochemical Company (OPC), Alexandria Fiber Company (AFCO), Misr Fertilizers Production Company (MOPCO), Egyptian Methanol Methanex Company (EMethanex) and Egyptian Bahraini Gas Derivatives (EBGDCO).

IFC’s Master Cooperation Agreement promotes increased collaboration with international financial institutions to help standardise steps that lenders take when co-financing projects with IFC in developing countries.

The Chief Executive and General Manager of Apicorp, Ahmed Hamad Al-Nuaimi, stated, “We are very happy to partner with IFC to support economically vital energy projects in the developing world. Such concerted support is critical to ensure crucial projects do not get delayed in the current economic environment, especially when such delays can have an impact on economic development. Many Arab states have oil and gas investments spanning the globe; the agreement with IFC will enable APICORP to support these investments efficiently.”

He added, “Apicorp’s robust balance sheet and financial stability as well as our strong industry expertise place us in an ideal position to finance oil and gas projects in developing economies. Our partnership with IFC is consistent with our strategic drive to widen our investments across the energy and petrochemical sector. Over the last few months, we have participated in financing transactions in the energy and petrochemical sector with a total value of $1.3bn with our commitments approximating $130m. We are now looking for new opportunities to further grow this.”

IFC created the MCA in response to calls by G20 nations for increased collaboration among international financial institutions to help meet financing shortfalls during the global financial crisis.

Lars Thunell, IFC EVP and CEO said, “IFC and Apicorp share a desire to support economic development and regional cooperation in the Middle East and North Africa, and to collaborate on energy-related projects in emerging markets globally.”

IFC has created a standardised framework for financial institutions to co-finance projects under its umbrella. Under the agreement signed with IFC, participating banks can use IFC’s existing syndication platform, deal-structuring expertise, and global presence to identify investments, perform due diligence, and negotiate loan documents.