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First Abu Dhabi Bank (FAB), the UAE's largest bank, has executed the first green repurchasing (repo) transaction in the Middle East, structured with Deutsche Bank.
A repurchase agreement (repo) is collateralised borrowing undertaken by a bank as part of interbank financing.
Under this agreement, FAB received EM Eurobonds collateral from Deutsche Bank and provided US dollar financing in exchange, according to a statement from the banks. However, the banks did not disclose the size of the transaction or interest rates.
Deutsche Bank will deploy the funds into green financing activities such as development of renewable energy and the improvement of energy efficiency and conservation.
Martin Tricaud, Group Head of Investment Banking at FAB said: “There is a rapidly growing demand for high-quality green financing solutions, both globally and regionally, as businesses and governments commit to net-zero targets on greenhouse gas emissions, and FAB aims to set an example for sustainability-related financing in our region. Seen against the backdrop of the COP26 climate summit, this transaction shows the financial sector working collaboratively to deliver successful and impactful financial solutions.”
FAB also holds the record for being first in the MENA region to issue a green bond.
Esra Turk, Head of Institutional Client Group CEEMEA and Chairman of the Investment Bank for MEA at Deutsche Bank said: “Deutsche Bank has placed sustainability at the core of its business and we are committed to supporting our clients transition to a net-zero carbon economy. We look forward to delivering further sustainable strategies which contribute to environmental and social objectives, while meeting our clients’ financing and investment needs.”
Deutsche Bank plans to introduce more ESG financial products for clients in the coming months. “Our ambition is to be a market leader in ESG fixed income,” Claire Coustar, Global Head of ESG for the bank’s Fixed Income and Currencies (FIC) business said in a statement. “We are one of the few firms to be a top tier player across the product spectrum and we want to leverage that expertise to help develop the sustainable finance market.”
(Reporting by Seban Scaria; editing by Daniel Luiz)
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