APICORP’s Murabaha Facility Named “ESG Deal of the Year 2022”

The Arab Petroleum Investments Corporation (APICORP), an energy-focused multilateral financial institution, won the “ESG Deal of the Year 2022” by Islamic Finance News (IFN) for its $75 million Murabaha facility to fund high-quality carbon offsets, the first of its kind facility in the MENA region.

Commenting on the agreement, Nicolas Thévenot, Managing Director, Corporate Banking at APICORP said: "We are delighted to receive this recognition from Islamic Finance News.

"The voluntary carbon offset Murabaha facility is truly a landmark transaction which underscores APICORP’s ongoing drive to offer innovative financial solutions in support of a balanced energy transition and decarbonizing the energy value chain to achieve the region’s 2050 net zero targets."

The carbon offset facility, which was signed by Hartree Partners Power & Gas Company, an affiliate of Hartree Partners LP, a global energy and commodities firm, will be used by integrated carbon solutions provider Vertree to develop high-impact decarbonization projects for the MENA region and beyond.

This transaction is a major milestone for APICORP's vision of supporting the region's sustainability journey.

Bryan Keogh, Group CFO at Hartree Partners LP, said: "We are thrilled to have partnered with APICORP on this unique Islamic facility.

"This recognition is a testament to the importance of our work and our commitment to the Paris Agreement targets, and we look forward to continuing our partnership with APICORP in the sustainability space."

Robust voluntary carbon markets have emerged as a cost-effective asset class for governments and corporations to decarbonize their footprints and for investors to mitigate risks associated with evolving climate regulations.

According to a report by Shell and Boston Consulting Group (BCG), the voluntary carbon offset market is projected to grow in value from about USD 2 billion in 2021 to USD 10-40 billion by 2030.

The IFN Deals of the Year award was established in 2006 to recognize those who have participated in the Islamic finance industry’s most groundbreaking transactions each year.

APICORP’s voluntary carbon credit facility was recognized for its innovative approach to addressing climate change and its adherence to the principles of Islamic finance. Moreover, the award acknowledges the facility’s syndication feature, which allows additional banks to join and gain exposure to this attractive asset class.