A consortium has been formed to boost investments in energy-related projects in Saudi Arabia.

It comprises the Saudi Arabian General Investment Authority (Sagia) and Swicorp, a premier Swiss-based private equity and investment banking firm in the Middle East and North Africa (Mena) region.
They announced that funding in energy-related projects would total $5 billion. The consortium to be known as the Swicorp Joussour Company (Joussour), is already considering 15 investment opportunities in the local market, a Sagia statement said.
The $5 billion funding for the new company is structured into debt and equity. $500 million has already been committed by partners who include The Savola Group, Dallah AlBaraka Holding Group, Asseer Company, AbdulKader AlMuhaidib & Sons Co., Hayel Saeed Group, Abdullatif Saoud Al Babutain & Bro Co, Abu Dhabi Holding, Saudi Bin Laden Group, Gulf Power Company and Swicorp Capital.
“Sagia aims to leverage Saudi Arabia’s competitive advantages in energy, transportation, information and communication technology as well as knowledge-based industries,” a statement said. Sagia has been setting up a number of sector-focused investment vehicles. The last such exercise took place on 15 November 2005 when a $100 million venture capital fund with Intel Capital was announced in Riyadh.
Sagia was instrumental in establishing Swicorp Joussour Company, which further complements the authority’s investment goals to create focused, yet sectored private equity offerings. Subsequently, Sagia will liaise with the concerned Saudi government bodies to facilitate investments Joussour is bound to attract.
Leveraging Swicorp’s in-depth regional knowledge, extensive network and regional contacts, Joussour will seek to invest primarily in midstream and downstream petrochemicals, energy-intensive industries, power generation and ancillary businesses to the oil and gas and petrochemicals sectors.
The Boston Consulting Group (BCG), a leading international strategy-consulting firm, has been advising Swicorp in establishing Joussour’s investment strategy. Going forward as the strategic advisor to Joussour, BCG will be screening and structuring specific investment opportunities, providing access to its worldwide network of leading corporations and multinationals.
“The global petrochemicals sector is going through a substantial transformation. In recent years, there has been a significant surge in the international trade of petrochemical products with forecasts pointing to continued strong global demand, particularly in the Asia Pacific region led by China,” the Sagia statement observed.
 “In addition, the availability of abundant competitive-cost feedstock in the Middle East, its proximity to the growing markets of Asia, and the widening gap of feedstock prices between the Middle East and higher cost regions which use feedstock linked to oil prices, will enhance the comparative advantages inherent to the region.”
The Swicorp Joussour Company seeks to benefit from these dynamics by structuring attractive deals with local players as well as joint ventures with major international players looking for reliable partners in the region. In addition, a strong appetite for acquisitions combined with the booming equity markets in the region will offer opportunities for attractive exits for Joussour, the statement said.
“Joussour’s establishment coincides with the dynamics of the global petrochemicals industry favoring Saudi Arabia as the centre of gravity for the sector,” said Amr Al Dabbagh, Governor of Sagia
Al Dabbagh said Saudi Arabia’s favorable economic indicators, cost-competitive feedstock and proximity to the growing markets of Asia enhanced the country’s competitiveness in the petrochemicals industry.
In addition to Sagia’s pro-active support, Joussour will leverage Swicorp and BCG’s combined international networks and in-depth knowledge of the petrochemicals and energy-intensive sectors as well as financial expertise to create value and achieve superior returns.
“The launch of the Swicorp Joussour Company is in line with our strategy to strengthen our position as a leading player in private equity in the region,” Kamel Lazaar, Swicorp’s president and managing partner said.
Earlier this year, Swicorp launched the Swicorp Intaj Capital (target capitalisation of $200 million), a diversified private equity fund targeting the growing consumer sector in the Mena region, and the Swicorp Emerge Invest Fund, an open-ended private equity fund focusing on Iran, Algeria and Sudan (over $100 million already committed).
Swicorp provides a comprehensive range of financial advisory and private equity services to domestic and international businesses active in the Middle East and North Africa. Founded in Switzerland in 1987, it currently has offices in Geneva, Algiers, Tunis and Tehran, with a logistics support centre in Jeddah. Following the successful receipt of a Saudi investment banking licence, Swicorp expects to open formal offices in Riyadh, Jeddah and Dubai within 12 months, with a third Saudi office planned for Dammam in 2006, bringing the total number of Swicorp offices to 8 by the end of 2006. With nearly 20 years of experience in mergers and acquisitions and private equity across the Mena region and in particular Saudi Arabia, Swicorp has established itself as one of the leading players in the region’s growing investment banking and private sectors.
Founded in 1963 the Boston Consulting Group (BCG) is a leading global general management consulting firm. It advises senior management at the world’s largest companies, bringing to bear leading-edge strategic thinking and globally networked expertise, resulting in sustainable competitive advantage and impact. Today, it has over 60 offices worldwide. Through its global energy and utilities practice area, BCG covers all segments and all steps of the value chain (oil, gas, power, coal, water), with expert teams for key topics in all segments. With over 30 specialised directors in Europe, the US and Asia, BCG has a long-term relationship with over half of the top companies in all segments, and has completed more than 650 projects in the target sectors over the past 5 years.