NBK Capital Partners, the Dubai-based fund manager, has made an investment in Saudi Arabia’s Energia Model Trading & Contracting, an energy rental business.
The sharia-compliant mezzanine investment is designed to enable the company to take advantage of increased construction activity and infrastructure spending arising from Saudi Vision 2030 – the country’s plan to diversify its economy away from oil dependency by developing areas such as health, education and tourism as well as infrastructure.
Specifically, the investment allows Energia to buy Al Faris Equipment Rental’s energy rental business, including the acquisition of a fleet of power generators previously leased to Energia.
With a diverse equipment base and engineering capabilities, Energia serves short- and long-term projects to repeat customers across industries such as oil and gas, utilities, industrials and infrastructure. One of the country’s largest suppliers of temporary power solutions, the firm has 500 generators and 250MW capacity.
Yaser Moustafa, senior managing director at NBK Capital Partners, said the firm aimed to take advantage of sectors that benefit from “secular trends” which, in Energia’s case, involves “the domestic electricity supply and demand imbalance in the Kingdom”.
The investment is the third from the $160 million NBK Capital Partners Mezzanine Fund II, which closed last year and has already invested in Qimam El Hayat, a private international school operator in Saudi Arabia, and Perkon, a Turkish electronic payment systems business.
Moustafa said Fund II is aiming for similar returns to its predecessor, NBK Capital Mezzanine Fund I, which achieved eight exits and delivered a 17 percent gross internal rate of return.
NBK, which has worked on more than $1 billion of investments, is active in private equity and real estate as well as mezzanine.