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Thu 28 Feb 2008 04:00 AM

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Energy bank given approval

First Energy Bank hopes to cash in on the global energy sector's expected investment boom.

First Energy Bank hopes to cash in on the global energy sector's expected investment boom.

The Central Bank of Bahrain has given its approval for a Sharia'a compliant bank dedicated to the energy sector.

First Energy Bank is being set up by Gulf Finance House (GFH) with a planned paid-up capital of US $750 million. The bank is designed to capitalise on the huge anticipated demand for investment within the global energy industry.

Estimates say the energy sector in the Middle East and North Africa region needs around US $56 billion worth of investment each year through to 2030 in order to meeting rising demand.

"A great opportunity comes from the significant demand that is projected for investment in the global energy sector over the next 25 years," said Esam Janahi, chairman of the founding committee for First Energy Bank. "First Energy Bank is a response to this imperative and we're proud to be associated with a Sharia'a banking concept that will be the very first to offer exclusively tailored investment, financing and service solutions to the energy industry.

GFH said First Energy Bank will target consistent returns for clients by focusing on oil and gas, petrochemicals, power and water projects and energy transportation. The bank plans to offer mezzanine capital and equity investments, and also to acquire businesses and business lines, among other activities.

GFH's acting CEO Peter Panayiotou stated: "A substantial number of new energy projects will be implemented by private developers who have a sound project concept, yet lack capital and extensive development expertise - two crucial elements that First Energy Bank can provide.

"Regional companies that focus their business primarily on the energy sector, such as local oil services firms that lack the resources to fully capitalise on the current growth in the sector will also be targeted as potential acquisitions."

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