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Standard Chartered Launches Sustainable Finance Variants of BBTL

by Madaline Dunn
written by Madaline Dunn

Multinational bank Standard Chartered has launched sustainable finance variants of Borrowing Base Trade Loans (BBTL).

BBTLs are structured to meet businesses’ specific financing requirements and allow them to obtain financing against a diverse pool of collateral, typically cash, inventory, or receivables. 

The financing amount is tied to the borrowing base and varies according to the client’s needs, which allows clients to consolidate multiple transactions under a single loan.

The sustainable finance variants of the BBTL integrate environmental, social and governance (ESG) criteria into the financing process.

These variants include recognition of facilities that support the trade of eligible materials within the applicable borrowing base. 

The sustainability-linked variants offer differential pricing for companies that demonstrate a commitment to and delivery of material and ambitious sustainability-related key performance indicators (KPIs) and associated targets. 

Such KPIs include reducing carbon emissions, increasing the share of renewable energy within their energy supply, or improving diversity among their management teams.

The solution will be available in the United States, UK, UAE, South Africa, Singapore and Hong Kong, with further market launches expected in the future.

“By integrating sustainability variants into our BBTL solution, we’re helping to empower our UAE clients to adopt more sustainable practices. This aligns with our commitment to offering finance to help facilitate our clients’ transition towards more sustainable business practices,” commented Syed Khurrum Zaeem, Head of Transaction Banking, Africa & Middle East, Standard Chartered. 

According to Standard Chartered, it has already rolled out a sustainable trade loan for Financial Institutions and an ESG-Linked Cash Account.

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ACCIONA Secures €300m in Sustainable Financing for Projects in the GCC 

by Madaline Dunn
written by Madaline Dunn

Spanish infrastructure company ACCIONA has secured sustainable financing worth €300 million. According to the multinational, this financing will fund projects aimed at reducing carbon emissions and fostering sustainable growth in the Gulf Cooperation Council (GCC) area.  

The financing is structured as a green loan, which is aligned with ACCIONA’s Sustainable Impact Financing Framework, the company said in a statement this week.

The proceeds will be allocated to projects related to renewable energy and sustainable water management initiatives, and will be aligned to the EU Green Taxonomy. 

According to the company, the margin of the financing is linked to a local impact initiative aimed at boosting sustainable construction by supporting local suppliers in developing and producing reduced or zero-carbon building materials such as cement, steel, and concrete.  

“This financing underscores ACCIONA’s strength in diversifying its funding sources while reaffirming our commitment to leading the development of low-carbon solutions in the GCC”, said José Ángel Tejero, Chief Financial and Sustainability Officer of ACCIONA. “We appreciate the support of the banks involved in this transaction and we are proud to deliver the region’s first Green Loan with Local Impact financing. Our goal is to continue integrating sustainable structures into our corporate debt.” 

ACCIONA’s Middle East portfolio spans the UAE, Saudi Arabia, Qatar and Oman. This regional portfolio includes desalination projects in the UAE, Qatar and Saudi Arabia.

The multinational conglomerate has also worked on wastewater treatment projects in Saudi Arabia, while in the UAE, it was involved in Dubai Metro Route 2020. The metro extension project obtained LEED Gold certification for seven metro stations.

“We’re delighted to provide ACCIONA with this Green Loan to support the energy transition in the Gulf Cooperation Council countries”, said Caroline Eber-Ittel, CEO – France and Head of Banking and Coverage Europe at Standard Chartered, which acted as one of the Green Loan Coordinators on the financing. “It is also a reflection of Standard Chartered’s expertise in finding opportunities and structured solutions that meet our client’s sustainability ambitions, and our commitment to mobilise $300 billion of sustainable finance by 2030.”  

First Abu Dhabi Bank also acted as Green Loan Coordinator, with SFI Markets as Arranger of the Financing, and Dentons as Legal Counsel.

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Zumo Joins Abu Dhabi Sustainable Finance Declaration

by Madaline Dunn
written by Madaline Dunn

B2B digital assets infrastructure Zumo has signed the Abu Dhabi Sustainable Finance Declaration, a voluntary membership-based initiative.

Launched in 2019, the initiative is aimed at increasing the depth and quality of green financial products in the Emirate and bolstering the sustainable finance industry to support the Emirate and the wider UAE in meeting the Sustainable Development Goals (SDGs).

By signing the declaration, Zumo will collaborate with other participants to help create a framework for fostering and integrating green and sustainable investments and provide expertise and insights.

Other signatories of the Abu Dhabi Sustainable Finance Declaration include the Central Bank of the UAE, the Abu Dhabi Securities Exchange, Deloitte and a number of others including First Abu Dhabi Bank, BNP Paribas, Citibank, HSBC, ING Bank, Macquarie and UniCredit.

Nick Jones, Founder and CEO of Zumo, commented: “Sustainability now sits high on the world’s corporate agenda, and we’ve seen the regulator in Europe, ESMA, introduce ESG disclosures for crypto-asset providers and token issuers through its MiCA framework.

“As we expand into the UAE, we look forward to working with industry stakeholders to share our knowledge and help to drive a sustainable digital assets sector in the Middle East.”

According to ING research, global sustainable finance issuance reached $800 billion in the first half of the year, almost matching the figure in the first half of last year. Meanwhile, looking at the regional landscape, at COP28, the UAE’s banking sector set the goal of mobilising AED1 trillion in sustainable financing by 2030.

Indeed, there’s a big climate finance gap, and banks have a significant role to play in filling it.

However, while there has been an uptick in commitments, research published earlier this year found that since the Paris Agreement, the world’s 60 largest private banks financed fossil fuels with USD $6.9 trillion. Alongside funding the climate crisis, the World Resources Institute has also revealed that banks are off-track to meet net-zero targets, with many of their pledges “less ambitious than they seem at face value” and their green financing far from enough.

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ADIB ESG Report Outlines Sustainable Finance Activities & Net Zero Plan

by Madaline Dunn
written by Madaline Dunn

In 2023, the Islamic financial institution Abu Dhabi Islamic Bank (ADIB) financed and facilitated a total of AED 5.567 billion in sustainable finance activities, according to its annual Environmental, Social, and Governance (ESG) report.

The bank outlined that this AED 5.567 billion encompassed 14 transactions, with all project financing deals screened using the ESG due diligence toolkit.

This, the bank said, is “fully in line” with the requirements of the Equator Principles.

ADIB also invested AED 1.677 billion in sustainable/green Sukuks.

The report also noted that the bank is “working on setting” a “comprehensive set of targets” for its Scope 3 financed emissions.

These Scope 3 targets will, according to the bank, guide it on strategically channelling financing away from “high-emitting” activities towards low-carbon alternatives.

For most businesses, Scope 3 emissions make up the majority of their emissions. In fact, they typically represent 90 per cent of total emissions.

As outlined in the ESG report, ADIB’s emissions reduction targets span six portfolio sectors, the “highest emitting,” representing 50 per cent of its total exposure:

  • Home finance,
  • Auto finance,
  • Real estate developers,
  • Air transport,
  • Utilities and
  • Petroleum manufacturing.

“Across these sectors, we have decided on production-based carbon intensity targets to be able to measure emissions’ performance and to support customers in their decarbonization efforts,” it said.

For 2023, the bank reported that its total emissions amounted to 13,933 tonnes of CO2e.

On Scope 1, it recorded a “reduction of 65 per cent” compared to the previous year. Scope 2 accounted for 13,310 tonnes of CO2 e).

This 13,933 figure also included total Scope 3 emissions for Category 6, which covers business travel emissions. These are indirect emissions derived from transportation undertaken by employees for business reasons.  

Despite often accounting for the majority of company emissions, mandatory Scope 3 reporting remains a contentious issue globally. While it has historically been a voluntary requirement, the tide is now changing, including in Europe under the EU Corporate Sustainability Reporting Directive (CSRD) and in California, US.

Commenting on the report, Mohamed Abdelbary, Acting Chief Executive Officer at ADIB, said: “ADIB’s strategic journey is marked by a steadfast commitment to innovation and sustainability. By integrating robust ESG frameworks into our operations, we are not only enhancing our service offerings but also contributing to the global efforts towards a sustainable future. We are proud of our achievements, ranging from issuing the largest green sukuk by a bank to advancing our Net Zero targets.”

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ESG Book, Risk Software Labs Partner to Serve Growing ESG Solutions Demand in MENA

by Madaline Dunn
written by Madaline Dunn

Sustainability data and technology company ESG Book has announced a strategic partnership with Risk Labs, a practitioner-based provider specialising in Treasury, Compliance, Risk and Finance disciplines to serve growing ESG Solutions Demand across the MENA.

The agreement will see ESG Book offer comprehensive services to financial institutions and corporates seeking to integrate ESG considerations into their strategic decision-making processes, leveraging Risk Labs’ regional expertise and client reach, it shared.

Speaking about the partnership, Ziauddin Ishaq, Managing Partner of Risk Software Labs Ltd, said: “Risk Software Labs Ltd, in close collaboration with ESG Book, will ensure companies across the MENA region can be confident they will be able to meet the challenges of their ESG and climate disclosures and reporting obligations, whilst simultaneously delivering superior analytical insights on the impact to their business operating models.”

ESG Book offers sustainability-related data, scoring, and technology products, providing access to almost 200,000 corporate disclosures and analytics, the company shared.

Nicolas Bös, Chief Technology Officer of ESG Book, said: “We are pleased to collaborate with Risk Labs to expand our footprint across the MENA region, where demand for transparent, technology-enabled ESG solutions continues to grow. This partnership underscores our commitment to empowering more organisations with the data and insights they need to navigate the evolving landscape of sustainable finance.”

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FinanceGovernanceLatest News

SFWG Launches Principles for Sustainability-Related Disclosures for Reporting Entities

by Madaline Dunn
written by Madaline Dunn

The UAE Sustainable Finance Working Group (SFWG) has announced the launch of its ‘Principles for Sustainability-Related Disclosures for Reporting Entities’.

This is part of the joint efforts of the UAE supervisory authorities to upgrade requirements for sustainability-related disclosures for UAE financial institutions.

The principles highlight four major considerations for reporting entities:

  • Implement adequate policies, procedures, and systems for reporting on sustainability-related matters;
  • Consider transparency, materiality, relevance, and stakeholder engagement when disclosing information,
  • Disclosures must mirror the way they operate, including in the areas of governance, strategy, and risk management, and
  • Consider specific elements when dealing with and offering sustainability-related products to enhance the transparency and quality of sustainability-related, product-level disclosures.

The principles were signed in Abu Dhabi by Mohammed Ali Al Shorafa Al Hammadi, Chairman of the SCA; Khaled Mohamed Balama, Governor of the Central Bank of the UAE (CBUAE); Essa Kazim, Governor of the Dubai International Financial Centre; and Emmanuel Givanakis, CEO of the Financial Services Regulatory Authority of Abu Dhabi Global Market (ADGM).

Following the signing, the UAE SFWG member authorities will officially release the principles for licensed financial institutions to encourage them to promote transparency in sustainability-related matters, it was shared.

Khaled Mohamed Balama, Governor of the Central Bank of the UAE (CBUAE), commented: “Launching the ‘Principles for Sustainability-Related Disclosures for Reporting Entities’ underscores the efforts to accelerate the development of an integrated sustainable finance ecosystem and bolster the resilience of the financial sector as part of the efforts to establish a leading global status for the UAE in sustainable finance and achieve climate neutrality by 2050 at the local and international levels.”

Ahmed Jassim Al Zaabi, Chairman of the Board of Directors of the ADGM, said: “We at ADGM, in collaboration with the UAE authorities, are proud of the SFWG’s continuous efforts to promote sustainable finance by introducing robust guidelines that drive transparency and proper disclosure among financial institutions and other entities in line with international standards. This work is a key component to the UAE economy’s transition to net zero and underscores our unwavering commitment to integrating sustainability into finance.”

Essa Kazim, Governor of the Dubai International Financial Centre (DIFC), added: “The ‘Principles for Sustainability-Related Disclosures for Reporting Entities’ announced today is a further testament to the UAE Sustainable Finance Working Group’s efforts in showcasing how the financial sector can lead the charge in addressing climate change and promoting a just transition to a sustainable economy.”

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FinanceSpecial Reports

Emerging Market Green Bonds Report 2023

by Madaline Dunn
written by Madaline Dunn

European asset manager Amundi and the IFC, a member of the World Bank Group, have published the sixth edition of the Emerging Market Green Bonds Report.

The report provides insight into the developments in the green bonds market for emerging markets and developing economies (EMDEs). 

The report found that the overall market for sustainable finance in EMDEs staged a rebound in new debt issuance during 2023 on the back of lower inflation expectations.

Specifically, it highlights a strong rebound in GSSS bonds issuance globally (up by 11 per cent, after a 10 per cent retreat in 2022), driven by green bonds (up 15 per cent) as well as by emerging markets (up 45 per cent), reaching $1 trillion to match the all-time high seen in 2021.

Meanwhile, in emerging markets, strong GSSS bonds issuance was seen across all sub-segments (up by 45 per cent overall in emerging markets and 65 per cent in EMDEs outside China). 

Further, it shared that China’s strong but relatively slower GSSS bonds issuance (up by 28 per cent) was driven by a combination of two factors:

  • Some reversion from a “remarkably” strong 2022, and 
  • Weaker domestic economic dynamics, particularly in the construction and real estate sectors.

In EMDEs outside China, GSSS bonds issuance was mainly driven by green bonds, which increased by 81 per cent. 

In the Middle East and North Africa, most notably UAE and Saudi Arabia, green bonds issuances more than doubled.

Non-financial corporates remained the largest green bonds issuers in developed markets (36 per cent of the total), while financial institutions dominated in emerging markets (58 per cent of the total). 

Meanwhile, green bonds issuance by sovereigns grew strongly: 33 per cent globally and 226 per cent in emerging markets.

The largest share of funds raised from the green instruments in EMDEs during 2023 was allocated for renewables, at 37 per cent. 

The next biggest allocation was for green buildings claiming 29 per cent of the total from 9 per cent a year earlier.

Read the full report here.

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FinanceLatest News

Fils and AFS Partner to Drive MENA’s Sustainable Digital Transformation

by Madaline Dunn
written by Madaline Dunn

Fils, a UAE-based enterprise-grade digital infrastructure provider, has announced a strategic partnership with Arab Financial Services (AFS), a digital payment solutions provider and fintech enabler in the Middle East and Africa (MEA) region to drive sustainable digital transformation in the region.

The partnership will leverage Fils’s fintech technology and AFS’s expertise and digital payments specialism, integrating sustainability into businesses’ operations, customer journeys, and financial transactions.

With AFS serving over 60 clients across more than 20 countries in the MEA region and offices in Bahrain, Egypt, Oman, and the UAE, the partnership will enable a significant proportion of banks, financial institutions, and organisations in the region to track and mitigate their emissions, it was shared.

Further, it was shared that the collaboration will explore opportunities to introduce sustainable financial products, with a specific focus on Islamic Credit Cards. 

Fils and AFS will also collaborate to enhance customer journeys by providing “eco-friendly and sustainable” options for electronic payments. 

This includes developing user-friendly interfaces that promote responsible consumer choices and a positive environmental impact, the two parties shared. 

Samer Soliman, CEO of AFS, commented: “We are proud to join forces with Fils in a strategic partnership to drive sustainable solutions within the digital payments landscape. This collaboration directly supports our ESG strategic goals by accelerating their implementation. As a leading digital payments provider, we embrace the responsibility to drive sustainability not only for ourselves but also empower our partners and clients to achieve their own environmental ambitions.”

Nameer Khan, CEO of Fils, said: “By combining our advanced digital infrastructure with AFS’s leadership in electronic payments outsourcing, we have a unique opportunity to drive positive change across industries in the MENA region. Our shared commitment to sustainability and climate action will not only transform business operations but also redefine the landscape of responsible finance in the region and beyond.”

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Aldar Investment Properties issues second $500mln green sukuk

by Madaline Dunn
written by Madaline Dunn

Aldar Investment Properties (AIP), a real estate management company in Abu Dhabi and a subsidiary of Aldar Properties PJSC (Aldar), has issued a USD 500 million green sukuk as part of its USD 2 billion Trust Certificate Issue Programme established in 2023, it has announced. 

The proceeds of this issuance will be used in accordance with Aldar’s Green Finance Framework, which supports investments in sustainable projects, including green buildings, energy-efficient property upgrades, sustainable water management, pollution control measures, and renewable energy sources.  

This is AIP’s second green sukuk, following its inaugural USD 500 million sukuk that was issued in May 2023. 

This ten-year issuance is priced with a 5.500 per cent coupon rate and, according to AIP, achieved the tightest credit spread ever secured by Aldar at 110 basis points and was four times oversubscribed, attracting interest from both regional and international investors. 

Aldar also tendered a buy-back of the Sukuk maturing in September 2025, which it shared provides existing investors with the opportunity to participate in the new issuance, with Aldar utilising the proceeds to refinance existing debt and extend its debt maturity profile.

Faisal Falaknaz, Chief Financial and Sustainability Officer at Aldar Properties, commented: “The overwhelming response to our latest green sukuk issuance reflects the market’s confidence in Aldar and the trust that exists in our ability to deliver our wide-ranging sustainability initiatives. It not only demonstrates our continued focus on driving positive environmental impact for the communities we serve, but also underscores our ability to deliver value for our investors over the long term with this issuance achieving the tightest credit spread we have ever priced.”

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Neem joins MENA Fintech Association & The Sustainable Fintech Alliance

by Madaline Dunn
written by Madaline Dunn

Not-for-profit organisation, the MENA Fintech Association, has announced its partnership with Neem, an embedded finance platform.

The MENA Fintech Association was founded back in 2018 and serves both fintech startups and established players across the Middle East and Africa (MEA) region.

Meanwhile, Neem, launched in 2019, offers a banking-as-a-service (BaaS) platform and was founded by fintech entrepreneurs Vladimira Briestenska, Nadeem Shaikh and Naeem Zamindar.

Neem noted that its inclusion in the MENA Fintech Association and the Sustainable Fintech Alliance signifies its commitment to fostering fintech innovation and advancing financial inclusion across the MEA.

It shared that by leveraging the collective expertise, resources, and innovative solutions of both organisations, the alliance is poised to drive change, empower marginalised communities, and unlock new avenues for growth throughout the MENA region.

“Together, they aim to spearhead pioneering initiatives, enhance accessibility to financial services, and catalyze the development of a more inclusive and resilient financial ecosystem for all stakeholders,” the company said.

Nameer Khan, Chairman of MENA Fintech Association, commented: “We warmly welcome Neem to the MENA Fintech Association. With their innovative embedded finance platform and extensive experience in the fintech sector, Neem brings valuable expertise to our diverse community. Together, we look forward to fostering collaboration and driving financial inclusion across the MENA region.”

“It’s an honor for us at Neem to join the industry-shaping and globally recognised MENA Fintech Association. We will actively contribute to its thought leadership, advocacy, and meaningful financial wellness and sustainability initiatives together with other leaders from the region,” added Co-founder at Neem, Vladimira Briestenska.

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