The Arab Petroleum Investments Corporation (APICORP) said Monday it has established a $3-billion Islamic sukuk programme to diversify its sources of funding and enhance links to global investors.

Sukuk is the Islamic sharia law-compliant equivalent of bonds.

The programme marks a strategic step for APICORP, the investment company of the Organisation of the Arab Petroleum Exporting Countries, as it is set to become a regular issuer of sukuk in global markets, it said in a statement.

Chairman Abed al-Saadoun said the move "will allow APICORP to diversify its funding sources, reduce the overall cost of financing, extend the company's debt matu-

rity profile, and enhance our access to a diverse set of global investors."

He said the programme will enable APICORP to extend attractive financing terms to its clients and partners and enhance its ability to participate in financing some energy projects not currently attractive to commercial banks.

Standard Chartered Bank is acting as sole arranger for the programme, which will be listed on the Irish Stock Exchange and rated by Moody's.

APICORP may start issuing its first sukuk later this year subject to market conditions, it said.

Established in 1975, APICORP, which is based in Dammam, Saudi Arabia, provides investments, loans and expert research to the Arab energy industry.