The Abu Dhabi Securities Exchange (ADX) launched on Wednesday the listing of First Abu Dhabi Bank’s (FAB) AED1.3 billion ($353 million) green sukuk, which is expected to contribute to the UAE’s economic diversification and sustainability efforts.
Launched ahead of COP28, the latest issuance is the largest-ever dirham denominated sukuk and the lowest-ever priced issuance in the market by a UAE financial institution. It aims to support the UAE’s objectives in driving a green, diversified and resilient economy, ADX and FAB said in a joint statement.
“This is an important milestone for both green finance and Islamic finance in the UAE, unlocking new opportunities for investments that achieve important social and sustainability outcomes,” said Hana Al Rostamani, Group CEO of FAB, the largest lender in the country with total assets of AED1.2 trillion.
FAB’s sukuk marks the fifth green debt instrument on the local bourse.
Last month, energy firm Masdar’s $750 million green bond listed on ADX, following earlier listings of $1 billion and $700 million green bonds by the Abu Dhabi National Energy Company (TAQA) and Sweihan PV Power Company.
Green finance has been growing in popularity among investors in the UAE and the rest of the Gulf region.
“The growing popularity of our green debt instruments on ADX reflects investors’ keen interest,” said Abdulla Salem Alnuaimi, CEO of ADX, adding that FAB’s new issuance “not only creates opportunities for investors but also contributes to the UAE’s economic diversification and sustainability objectives.”
In 2022 alone, the GCC market recorded over $8.5 billion in green and sustainable bonds and sukuk issuance, compared to just $605 million in 2021, PWC cited in a report. The increase is noteworthy, the report said, since global issuance of green bonds fell by 14% during the same year.
The total value of the domestic market for green sukuk, bonds and loans has so far reached nearly $17 billion, state news agency WAM reported last year. As of 2020, the size of the global market for green sukuk was pegged at $1 trillion.
(Writing by Cleofe Maceda; editing by Seban Scaria) email@example.com