Apicorp inks MENA region’s first Islamic financing agreement for voluntary carbon offsets: Saudi Arabian energy-focused multilateral financial institution Arab Petroleum Investment Corporation (Apicorp) has signed a USD 75 mn murabaha agreement with global energy and commodities firm Hartree Partners to fund voluntary carbon offsets, according to a company press release.

What is murabaha? It’s an Islamic financing structure where the seller and buyer agree to the cost and markup of an asset, making it sharia-compliant since it does not bear interest.

What will the agreement do? The facility will fund high-quality voluntary carbon offsets to develop environmentally friendly projects registered with the nonprofit platform Verra, a global registry for nature-based offsets.

A first in MENA: “The facility’s shariah compliance and syndication features can have major implications because they make it convenient for the regional market to adopt and enable additional banks to join and gain exposure to this asset class,” Apicorp CEO Khalid Ali Al-Ruwaigh said.

Advisers: Norton Rose Fulbright Dubai acted as the lender’s counsel and Reed Smith LPP Dubai provided counsel to Hartree Partners. Shariah advisory services and the issuance of an operating fatwa were provided by Shape Knowledge Services. DD&Co Limited supplied the London Metals Exchange with approved non-ferrous base metals for each Shariah-compliant murabaha transaction.