A lending unit of the Saudi Arabia-based Islamic Development Bank has provided $80mn as reinsurance to cover political risk for oil and gas projects in Egypt, Reuters has reported.
The credit issued by the Islamic Corporation for the Insurance of Investment & Export Credit (ICIEC) will act as a financial provision to existing investors in the country and will aim to attract new firms to the Islamic capital markets.
The amount issued covers the Overseas Private Investment Corporation for its own insurance policy on the exploration projects of Houston-based Apache Corporation in Egypt.
The policy would allow Egypt to retain foreign direct investment during a “critical transitional period”, said Hani Salem Sonbol, ICIEC’s acting chief executive.
Apache is the largest U.S. investor in Egypt and the largest producer of natural gas in the Western Desert, where it has been granted several concessions by the government.
In December, Apache and Shell Egypt signed the first fracking contract in the North African country.
Apache has designated about $1bn to cover political risk, however, part of that cover expired in 2011 after the Arab Spring and has not been renewed since.
