Dubai-based alternative investments firm NBK Capital Partners is investing in Saudi energy rental business Energia Model Trading & Contracting.
NBK said the sharia-compliant mezzanine investment will enable Energia, a temporary power solutions provider, “to expand and take advantage of the increased construction activity and infrastructure spending” boosted by Saudi Arabia’s development plans.
Mezzanine investment is a hybrid of debt and equity financing that gives the lender the rights to convert to an ownership or equity interest in the company in case of default, after venture capital companies and other senior lenders are paid.
NBK said its investment also supports Energia’s buyout of the energy rental business of Dubai's Al Faris Equipment Rental— including the acquisition of a fleet of power generators previously leased by Energia.
The Energia Al Faris portfolio includes diesel generators from Cummins Power Generation, FG Wilson and G-Drive. Equipment includes diesel and alternative-fuelled electrical generator sets from 35 to 1250KVA, transfer switches from 40 amps to 3,000 amps, paralleling switchgear and generator set controls
Yaser Moustafa, NBK’s senior managing director, said: “We are committed to delivering superior returns for investors and this growth capital is consistent with our goal of investing in sectors that benefit from secular trends— in Energia’s case the domestic electricity supply and demand imbalance in the kingdom. Energia has earned a strong reputation among its target market thanks to its long-standing partnership with Al Faris and excellent service standards.”
The Energia deal marks the third investment of the $160 million NBK Capital Partners Mezzanine Fund II, which was raised in 2017.