FAB pulls the trigger on inaugural green sukuk issuance: The UAE’s largest bank First Abu Dhabi Bank (FAB) issued a three-year AED 1.3 bn (c. USD 350 mn) shariah-compliant green sukuk, according to a statement released on Thursday.

The details: The green sukuk was priced at 4.93% on Wednesday — the lowest price offering in the AED market for the bank to date, the statement notes. The issuance marks a first for the bank both in terms of green sukuk and AED-denominated issuances, it adds. FAB acted as joint lead manager and green structuring agent on the issuance, the statement notes.

FAB is a major player in the GCC’s green bond scene: Hailed as a leader in regional greenfinancing, the bank issued a USD 600 mn five-year green bond last June, upsized from an initial target of USD 500 mn on the back of a 2.8x oversubscribed orderbook. FAB acted as one of the lead managers for Majid Al Futtaim’s most recent green sukuk issuance — which saw the UAE retailer raise USD 500 mn — and also acted as an advisor on Abu Dhabi National Energy Company’s shariah-compliant USD 1.5 bn dual-tranche green bond issuance and Dubai Islamic Bank’s second green sukuk issuance, which saw it raise USD 1 bn. The bank also served as an advisor on Saudi Electricity Company’s USD 2 bn green bond last April. In 2022, the bank raised USD 1.49 bn through three green bond issuances.

REMEMBER– Interest in green and sustainable finance issuance has been on the rise in the region in recent months ahead of COP28 in the UAE. BNP Paribas said earlier this year that it forecasts the global climate-friendly bond sales to climb up to c. USD 600 bn, outstripping 2021’s all-time high. The MENA region reported a 532% y-o-y rise in green and sustainable finance to USD 24.55 bn in 2021, up from USD 3.8 bn a year earlier, according to a report by consultancy Arthur D Little.

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