Dubai Investments acquires strategic stake in First Energy Bank

In a transaction valued at $65m, DI acquired 50 million shares, or 5% of the total holding of First Energy Bank, which is promoted by Gulf Finance House, Bahrain's premier Islamic investment bank. First Energy Bank commenced operations in June 2008.

Khalid Kalban, MD and CEO of Dubai Investments, said:

"We see this acquisition as a significant step in expanding our investment horizons within the Arab region."

He added, "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."

"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 added. "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."

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 are planned to 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 $107m and a Return on Investment (RoE) of 11% 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.