The Arab Energy Fund (AEF), a Riyadh-based multilateral lender specializing in the energy sector of the Middle East and North Africa (Mena), has successfully raised $650 million through a five-year bond issuance. Initially aiming for $500 million, AEF increased the target due to overwhelming demand, which resulted in orders surpassing $935 million. This issue was highly sought after, being oversubscribed by 1.4 times.
The bond's attractiveness extended beyond the Mena region, capturing interest from global investors. Approximately 40 percent of the investment came from regions outside Mena, including Asia, Europe, and offshore US accounts. Financial institutions were the primary recipients, with banks, treasuries, and private banks securing 52 percent of the allocations. Central banks and sovereign entities claimed 38 percent, while the remaining portion went to asset managers, hedge funds, and other institutional investors. The bond was priced at a yield of 4.9 percent, reflecting favorable market conditions and investor confidence in AEF's financial strength.
A significant milestone for AEF, this successful bond issuance underscores its commitment to sustainable development. In line with its strategic goals, the fund has pledged a $1 billion investment towards decarbonization efforts as part of its push for an energy transition. Since its establishment in the 1970s, AEF has grown substantially, with assets now exceeding $10 billion and a loan portfolio valued at $5.3 billion. The fund’s recent acquisition of Metito Utilities, a leading water and wastewater project developer based in Dubai, further highlights its dedication to advancing critical infrastructure in the region. This achievement not only bolsters AEF's financial position but also reinforces its role in driving positive change and sustainability within the energy sector.
