Saudi's Alfanar secures $75m in Islamic financing for energy projects

Apicorp to fund EPC contractor's renewable energy project portfolio's expansion under five-year Murabaha deal

Alfanar's plans include a wind project [representational image].
Alfanar's plans include a wind project [representational image].

Saudi Arabia-based Alfanar Company has secured $75m (SAR281.2m) in Islamic financing from Arab Petroleum Investments Corporation (Apicorp) to support its renewable energy projects, including a wind power development in Spain.

The five-year Murabaha financing facility, Apicorp said in a statement, comes as Riyadh-based Alfanar looks to tap into the growing global demand for renewable energy.

Also referred to as cost-plus financing, Murabaha is an Islamic financing structure whereby both the buyer and seller agree on the profit for an item.

An engineering, procurement, and construction (EPC) contractor, and a manufacturer of electrical products, Alfanar Co aims to deploy 3GW of renewable power by 2022, with plans to grow its portfolio to 4-5GW by 2025. 

Speaking on the agreement, Jamal Wadi, chief executive officer at Alfanar Global Development, said: “With an existing portfolio exceeding 1.5GW of renewable development projects around the globe, Alfanar is committed to further double its portfolio in the next few years.

“The signing of the Murabaha agreement with Apicorp brings us a step closer to realising our commitment. This partnership with Apicorp comes at a time when Alfanar is also diversifying its portfolio and venturing into new markets.”

The deal comes less than two months after Alfanar inked an agreement with Electric Generation Company Bangladesh for the construction of a 100MW solar independent power project.

The agreement was one of six deals signed between Bangladesh and Saudi Arabia at a ceremony in the offices of Prime Minister Sheikh Hasina during a senior Saudi delegation visit to the Asian country this March. 

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