Dubai Investments (DI), the largest investment company listed on the UAE stock exchange, has acquired a strategic stake in Bahrain-based First Energy Bank.
The first Sharia’a compliant bank focused on investment and financial services in the energy sector in the region, First Energy Bank, had only started its operations this June.
In a transaction valued at $65 million, DI acquired 50 million shares, or 5 per cent of the total holding of First Energy Bank, which is promoted by Gulf Finance House, Bahrain’s premier Islamic investment bank.
“We see this acquisition as a significant step in expanding our investment horizons within the Arab region,” said Khalid Kalban, managing director and CEO of Dubai Investments.
“Dubai Investments is focused on diversifying its investments and widening its geographic reach, and occupying a position of primacy across the business and financial spectrum remains at the core of our strategic ambitions,” he noted.
“The energy sector is projected to grow dramatically over the next few years, driven by rapid economic development and population growth, and as the energy hub of the world, the Middle East is poised to see a significant rise in demand for investment services focused on the energy sector,” Kalban explained.
“First Energy Bank will rely on its core competencies to cater to this rapidly emerging market and will offer clients in the energy sector the full complement of advisory, investment and financial services,” he added.
First Energy Bank focuses primarily on the oil and gas (upstream/downstream), transportation, petrochemicals, power and IWPP (Independent Water and Power Production) sectors within the energy spectrum.
Investment activities of the bank include energy development projects, co-investment in development projects, corporate acquisitions, asset/portfolio acquisitions, and mezzanine capital/preferred equity.
First Energy Bank is expected to generate a net profit of $107 million and a return on investment (RoE) of 11 per cent in its first year of operation itself.
According to International Energy Agency (IAE) estimates, $4.3 trillion of new investment will be required globally in the oil sector through 2030, while approximately $3.9 trillion is projected to be invested in the gas sector.-TradeArabia News Service