JD Capital unveils wide-ranging investments

JD Capital had maintained a relatively low profile in some respects since it was first established in May 2005. In its first few months, the company's senior management was put in place and then last summer it was part of a joint venture with the Ishraq Gulf Real Estate Company to build three budget hotels in Jordan at a cost of $45 million, while it also bought into the Islamic Insurance Company. But at last month's WEF, JD Capital really stepped into the limelight.

Energy Arabia acquisition

One of JD Capital's main tasks last year was setting up, via its energy investment arm JD Energy, a new joint venture alongside Malaysia's Malakoff and the Consolidated Contractors Company called Energy Arabia. At the WEF, it was revealed that Energy Arabia had acquired a controlling stake in Jordan's Central Electricity Generating Company.

Early last year the Jordanian government invited potential investors to submit bids to acquire 51 per cent of Cegco, as part of the process of privatising the Jordanian power sector, and Enara's bid came out on top. The government will retain a 40 per cent holding in the $645 million firm, while a 9 per cent stake will be transferred to the Social Security Corporation.

Samir Al Rifai, Chairman of Enara and CEO of Jordan Dubai Capital, said the deal constituted JD Capital's largest investment venture to date and also its first major stake in the energy sector. He added that in both Jordan and the region as a whole there was a need for 'environmentally friendly and sustainable alternative energy resources' and that JD Energy was committed to providing these.

From resorts to home finance

It was undoubtedly a busy few days by the Dead Sea for JD Capital as two more of its new projects, both in partnership with the Social Security Investment Unit, emphasised the firm's determination to diversify its investments across a broad range of sectors.

JD Capital and the SSIU are to join forces to develop the Munya Woodland Resort and Spa in northern Jordan at a cost of around $50 million. The project will see the construction of a 40 room hotel, 50 residential units and a traditional market for local products. The development will be located in the forest at Dibbeen and it is hoped the scheme will not only boost tourism in the area but also create significant job opportunities for local people.

Indeed, the resort, which should be ready by 2010, appears to be an adaptation of a more ambitious venture first revealed by JD Capital last year for a development costing well over $100 million and involving the construction of several hotels. But pressure from environmental campaigners, concerned at possible damage to the forest's eco-system, has seen a change of plan and, indeed, location to the outskirts of the woodland.

JD Capital and the SSIU are also coming together to form Inwan, the kingdom's first specialised mortgage finance company, with a start-up capital of $75 million. Inwan will aim to provide loans to both home owners and property developers and will also target the financing of middle and low income housing. As part of the venture, JD Capital and the SSIU will own an equal stake of 25 per cent each, while the Global Investment House, Tameer Jordan and the Jordan Kuwait Bank will hold differing stakes, comprising the remaining 50 per cent.

Strategic partnership

The final deal unveiled at the WEF saw JD Capital team up with Dubai International Capital, its parent firm, and the Dubai Islamic Bank to form a strategic partnership with Jordan's Industrial Development Bank. The three firms will collaborate to acquire a major stake in the bank at a cost of around $100 million. Samir Al Rifai said he believed the banking regulatory environment in Jordan would provide a solid basis for future growth while he also revealed that the partnership would apply for a licence to set up a new Islamic bank in the kingdom at a later date.

With the financial leverage of the DIC behind it, itself the investment vehicle of the mega Dubai Holding, there is every chance the four announcements made on the shores of the Dead Sea last month will be followed by several more and that JD Capital will continue to explore further development projects and buyouts in the kingdom.