01 February 2022

The Arab Petroleum Investments Corporation (Apicorp), an energy-focused multilateral development financial institution, has partnered with the Islamic Development Bank (IsDB) to set up the Infra Initiative, a $1-billion private sector-focused infrastructure financing initiative.

The Infra Initiative’s funds will be used to finance strategic utility projects that contribute to human and economic development in the two multilateral financial institutions’ member countries and their respective development strategies.

The two institutions will jointly identify and deliver structured finance facilities to utilities projects with limited access to international financing, said Apicorp. The scope of the Infra Initiative, which will launch for an initial period of three years, includes all OIC countries, with priority given to the 10 member countries common to the duo. However, projects in other countries are also eligible, provided they are sponsored by a company headquartered in one of the shared member states, it stated.

Under the Infra Initiative, funds will be allocated to electricity generation and transmission projects which utilise renewable energy or natural gas, as well as water and waste management facilities.

The involvement of the private sector at the local, regional, and international levels will also be a priority in the project selection process, it added.

Through the Infra Initiative, the duo aim to address low private sector participation in funding energy projects by incentivising public-private partnerships (PPPs) to bridge the estimated $200 billion investment gap in such projects in the Organization of Islamic Cooperation (OIC) member countries.

Additionally, the initiative aims to mobilize other financing channels from commercial banks, other multilateral development banks, development agencies, and the capital markets, it stated.

According to Apicorp’s 2021-2025 Mena Energy Investment Outlook, the share of private investments in regional energy projects is set to reach 27 per cent by 2025.  

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