| Project description |
This project involves an IFC equity investment for a minority stake in Amlak Jordan (Amlak Jordan or the company). Amlak Jordan is the first specialized housing finance company as well as the first specialized provider of Islamic Mortgage Products in Jordan. IFC has identified this transaction with Amlak Finance UAE (Amlak or the sponsor), a leading Mortgage Finance Company in the UAE.
IFC is considering Amlak as a potential MENA regional champion and has been in discussions with Amlak on their future regional expansion plan. Amlak Finance UAE views this project as a step toward a long term partnership with IFC, which may lead to a number of similar ventures in other parts of MENA. |
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| Project sponsor and major shareholders of project company |
The project is sponsored by Social Security Corporation, Jordan Dubai Capital and Amlak Finance UAE. Amlak Finance UAE is one of the largest publicly listed Islamic mortgage finance companies in the region. Amlak was established in 2000 as a subsidiary of Emaar Properties, a UAE top real estate developer, and has evolved into a widely held publicly listed Islamic financial institution. Amlak Finance is currently 48 percent owned by Emaar Properties and with the balance of the shares being actively traded on the DFM. Amlak is a market leader in the Islamic home finance sector in the UAE with a 35% market share.
Amlak Jordan recently completed an IPO for 25% of the company, which closed on June 1st. The post-IPO & equity injection shareholding structure of Amlak Jordan is detailed below:
__%__ No. of Shares
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| JDII (Joint Venture) * | 32.5% | 20,505,000 |
| Social Security Corporation (Jordan) | 20.2% | 12,755,000 |
| Arab Banking Corporation | 5.6% | 3,500,000 |
| Global Investment House | 3.2% | 2,000,000 |
| Tameer | 2.3% | 1,419,799 |
| Jordan Kuwait Bank | 0.8% | 500,000 |
| Masaken | 0.9% | 570,201 |
| Public | 21.8% | 13,750,000 |
| Equity Increase Amlak UAE | 7.9% | 5,000,000 |
| Equity Increase IFC | 4.8% | 3,000,000 |
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Amlak Finance UAE’s indirect shareholding in Amlak Jordan pre-IPO, amounted to 14.08 % and is through the Jordan Dubai Islamic Investment Company (JDII). JDII is a joint venture between Amlak Finance UAE (37.79%) and Jordan Dubai Capital (62.21%). Amlak UAE’s direct and indirect shareholding in Amlak Jordan post-IPO and post equity injection will be approximately 22.3%. |
| Total project cost and amount and nature of IFC's investment |
| Under the proposed project, IFC will acquire a minority equity stake in Amlak Jordan of up to 5% of capital in an amount up to US$ 4.2 million as well as support the company with a long term senior loan of up to $40 million. |
| Location of project and description of site |
| The proposed investment will be in Amman, Jordan. |
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| Anticipated development impact of the project |
The project is expected to have high development impact by helping develop broad-scale and sustainable mortgage lending in Jordan through providing support to a promising new specialized mortgage finance provider. Specifically, the project is expected to have an impact in the following areas:
- promoting south-south investment and facilitating the movement of excess liquidity from UAE to lesser developed Jordan;
- providing access to a growing segment of the Jordanian population to new products such as Shariah Compliant Housing Finance; and
- deepening the local mortgage market through provision of mortgages to Amlak Jordan’s arrangement with several developers in Jordan. |
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| IFC's expected development contribution |
IFC has several roles and contributions in this project. Although Amlak Finance UAE has access to capital, it is looking to enhance its branding by successfully expanding regionally and into emerging markets. Amlak Finance UAE views the IFC as a partner that can add value to its domestic and regional strategy as it engages with new business partners, co-investors, and regulatory authorities in these markets.
Additionally, IFC’s proposed equity and long term senior loan investments in Amlak Jordan will have a strong role in supporting a MENA regional partner to become the market leader in mortgage finance products regionally. Moreover, as equity partner, IFC is expected to bring its global standards of corporate governance and international best practices. |
| Environmental and social issues - Category FI |
This project has provisionally been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure.
During appraisal, IFC will analyze the activities proposed to be supported with IFC financing for types of transactions, size, tenor and industry sectors and determine the Applicable Performance Requirements, if any, that would include a combination of:
- The IFC FI Exclusion List,
- The applicable National Social and Environmental Laws and regulations, and/or
- The IFC Performance Standards
Amlak will be required to:
- Develop a Social & Environmental Management System (SEMS) to the satisfaction of IFC
- Identify responsible, qualified persons to manage and implement the SEMS
- Commit to implement the SEMS, to ensure that its investments/activities supported by IFC financing are in compliance with the Applicable Performance Requirements
- Submit a periodic report to IFC as per a format to be provided by IFC
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| For inquiries about the project, contact: |
Shaher Al-Araj
Amlak Finance Jordan
Jordan Dubai Capital Building
Airport Road 7th Circle - Amman
P.O. Box 852101 Amman 11185 Jordan
Telephone: +962 658 65664
Fax: +962 658 58931
E-mail: saraj@amlakfinance.com
Website: www.amlakfinance.com |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
| Local access of project documentation |
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