DUBAI (Reuters) - The Arab Petroleum Investments Corporation (APICORP) [APICO.UL] has added another $500 million to the roughly $2 billion of allocated financing for 2020 to help its energy sector clients deal with impact of the coronavirus and oil price fluctuations, its chief executive said on Wednesday.
Owned by the countries that comprise the Organization of Arab Petroleum Exporting Countries (OAPEC), APICORP’s mandate is to promote the development of the public and private energy industry in the region.
“The $500 million figure is an additional allocation to our programme for 2020 which is in the range of $2 plus billion which we normally do every year,” CEO Ahmed Ali Attiga said in an interview.
The package will be deployed to support sustainable impact-driven projects and offer funding and working capital to utilities, renewables, petrochemicals, amongst other energy sub-sectors, according to a statement.
“It is a COVID-19 recovery intervention which will concentrate on the worst hit sectors and countries like Bahrain, Oman, Iraq, Egypt and other countries in the region,” Attiga said.
Since the start of the year oil prices have lost more than two-thirds of their value. Fuel demand is down about 30% worldwide in April and supply will outstrip demand for months due to the pandemic.
“The COVID-19 crisis has created a full range of new challenges at the same time with oil price fluctuations,” he added.
Although it is too early to assess the extent of the impact, Attiga said, first-quarter results has shown early signs of financical pressure.
“This is a drop in the bucket compared to the need,” the CEO said, which requires APICORP to work with other multilateral development banks and financial partners to mobilize funding and mitigate the impact.
The Saudi-headquartered multilateral development bank had total assets of $7.35 billion at the end of December, according to its latest financial results.
The bank recently announced a landmark increase in callable capital to $8.5 billion, as well as a significant increase in authorised and subscribed capital.
(This story refiles to clarify ownership of APICORP in paragraph two)
Reporting by Dahlia Nehme; Editing by Louise Heavens and David Goodman