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Top Gulf banks help raise $787m in sustainable credits

Asian Agri's Buatan oil palm plantation in Riau, Indonesia. Apical is one of the largest exporters of refined palm oil in the country Supplied/Apical
Asian Agri's Buatan oil palm plantation in Riau, Indonesia. Apical is one of the largest exporters of refined palm oil in the country
  • FAB and National Bank of Kuwait among lead arrangers
  • Other lenders include National Bank of Fujairah and Invest Bank
  • RGE aims to contribute more to growth of Mena’s SLL issuance

Two leading Gulf banks have helped arrange nearly $800 million in sustainability-linked loans for a leading agricultural producer based in Singapore, as local institutions prioritise green lending in their portfolios. 

First Abu Dhabi Bank (FAB), the UAE’s largest bank by assets, and National Bank of Kuwait, the country’s biggest financial institution, acted as lead arrangers, bookrunners and underwriters for $787 million in sustainability-linked loans (SLL) for Apical Group, a subsidiary of Singapore’s Royal Golden Eagle (RGE).

FAB has extended some of the biggest SLLs in the Middle East to industry heavyweights such as Majid Al Futtaim and Etihad Airways.

Fawaz Abusneineh, acting head of global corporate finance at FAB, said the transaction benefited both local and Asian markets and aimed to support sustainability-linked or green financing facilities.

Apical’s $787 million SLLs are tied to specific and measurable environmental, societal and governance targets which the company has to meet. 

Tey Wei Lin, president of RGE, said he was encouraged by the strong participation from Middle Eastern banks. “We aim to contribute more to the growth of sustainable financing in the region, as we grow our business,” he said.

Other Middle Eastern lenders in the consortium of more than 20 banks included the National Bank of Fujairah and the UAE’s Invest Bank.

The involvement of Gulf banks is part of a growing regional appetite for SLLs in the Middle East and North Africa. Issuance rose from $4.5 billion in 2020 to $18.64 billion in 2021, according to Bloomberg Capital Markets league tables. 

Green debt issuance in the Gulf last year set new records, exceeding oil, gas and coal-related financing for the first time since 2015. 

Bloomberg data showed that total GCC green and sustainable bond and sukuk issuance reached $8.5 billion from 15 deals in 2022, compared with $605 million from six deals in 2021.

Saudi Arabia was the leading issuer within the region, accounting for more than half of the total volume, with the UAE comprising a sizeable share of the remaining issue volume. 

Earlier this month, Saudi’s sovereign Public Investment Fund raised $5.5 billion through its green bond issuance, which was more than six times oversubscribed, with books exceeding $33 billion.

It followed PIF’s inaugural 100-year green bond in October 2022, the first of its type issued by a sovereign wealth fund.

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