The Arab Energy Fund posts highest net income on record for second straight year

The Arab Energy Fund (formerly APICORP), a multilateral impact financial institution focused on the energy sector, announced today its financial results for the period ended December 31, 2023.

In a statement to Argaam, the results showed that the fund achieved its highest ever net income for the second consecutive year, in light of asset growth, capital gains, improved financing and liquidity rates, cost management, diversification of the financing portfolio, and a favorable interest rate environment.

The fund’s net income jumped 51% year-on-year (YoY) to $225 million. The fund also realized capital gains of $20.6 million. Total assets also increased by 12% YoY to $9.88 billion.

Commenting on the 2023 results, Khalid Ali Al-Ruwaigh, CEO of The Arab Energy Fund, stated that these financial results represent a culmination of a year full of significant developments for the fund. In addition to launching our new brand and strategy and relocating our headquarters to Riyadh, we recorded the highest ever net income in the fund's 50-year history.

“Our business lines contributed to our record-setting results. We continued to build a solid foundation for the future by aligning our debt and equity portfolios and innovative solutions with our vision of becoming a pre-eminent impact investor in the MENA region and support a more sustainable energy ecosystem and circular carbon economy,” Al-Ruwaigh added.

The Arab Energy Fund doubled its operating income to $170 million, compared to the previous year following the restructuring of the fixed-income portfolio to improve liquidity and financing rates, enhance returns, and manage interest rate-related risks. The value of the treasury assets portfolio came in at $3.6 billion as of December 2023.

In line with the ambitious vision of The Arab Energy Fund and its updated business approach, focusing on long-term growth and impact, the fund’s headquarters was relocated to the Saudi capital Riyadh, the vibrant economic hub of the Kingdom and one of the region’s leading financial hubs. This was followed by participating as a Climate Supporter in COP28, where it publicly announced its new trademark name, “The Arab Energy Fund”, and its new strategy, which includes investing up to $1bn over the next five years in decarbonization and local supply chains.

In addition, the fund leveraged the global event to launch “50+”, a training program which aims to enable the next generation of energy industry leaders by giving university graduates an immersive six-month training program in the field of energy finance.

Business line highlights

Investment & Partnerships

The Investments & Partnerships unit’s asset portfolio stood at nearly $1.4 billion, a 13% YoY rise. The unit’ gross operating income reached $110 million, recording a 9% YoY decrease. Further, strong capital gains of $20.6 million were recorded from the successful exit from Ashtead Technology.

Corporate Banking

The Corporate Banking unit asset portfolio grew by 14% YoY at year-end 2023 to reach just under $4.8 billion. Operating income leapt by 82% YoY to $360 million as the unit continued to expand its range of financing solutions to include project bonds for the first time. It also entered new markets such as the United States and Nigeria and financed new energy subsectors and diversified its sector portfolio to include nuclear power and industrial waste management.

Source : Argaam