The Arab Petroleum Investments Corporation (APICORP), an energy-focused multilateral financial institution, announced that assets related to its debut green bond have reached USD 335 million as of 31st October 2022.
The figures, unveiled in APICORP’s first Green Bond Report for 2022, bring the Corporation’s portfolio of environmentally-linked assets financed for the period to USD 664 million, which now make up 13% of the total loan portfolio compared to 3% in 2016, highlighting the strategic shift to enabling a balanced energy transition.
The report follows global best practices to measure the impact of APICORP’s debut USD 750 million green bond issuance in October 2021, which has been allocated to 10 eligible projects in five countries, including Saudi Arabia, UAE, Egypt, Jordan, and Spain.
In line with the guidelines of APICORP’s Green Bond Framework, 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 20,057,118 of carbon dioxide equivalent (TCO2e) per year.
Khalid Ali Al-Ruwaigh, CEO of APICORP, said, “We are delighted to share the results of our first Green Bond Report, following our debut green bond issuance in FY2021 as we continue to strive for transparency and hold ourselves to the highest standards of corporate governance. We strongly believe that green bonds are an important tool for supporting the transition to a more sustainable and low-carbon economy. 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 remaining USD 415 million from the unallocated green bond proceeds was invested into other green assets including securities and funds which comply with the green bond framework.
Dr. Yasser Gado, Treasurer and Chairman of the Green Bond Committee at APICORP said, “APICORP follows a rigorous review process for any transaction identified as eligible for green financing under our Green Bond Framework. Through our due diligence process, deployment of proceeds has been challenging given the economic conditions that impact manufacturing and supply chain, but we expect conditions to improve and we can finance high-quality clean energy projects with the remaining proceeds.”
The global green bond market has been gaining traction in the past decade and is projected to surpass USD 5 trillion by 2025, driven by increasing demand for sustainable investment options and a growing awareness of the need to address climate change challenges.
The report details APICORP’s methodology in selecting projects for financing including eligible categories and impact indicators, along with the social and environmental impact of each project funded. Some of the largest projects financed include Shuaa 2 and Shuaa 3 in the UAE, Sudair One in Saudi Arabia, and Al Fanar Wind Farm in Spain.