Abu Dhabi Islamic Bank (ADIB), a leading financial institution, announced today the provision of US$61 million in financing for green-certified projects in Saudi Arabia…reports Asian Lite News
In collaboration with MUFG, Alimna Bank, Riyad Bank and Siemens Bank, US$480 million of green finance was allocated for three independent sewage treatment plants (ISTP) in the Kingdom.
ADIB acted as mandated lead arranger, hedge provider and Islamic finance agent for this transaction. In accordance with Saudi Arabia’s Vision 2030, its blueprint for sustainable development and economic diversification, the three ISTPs will treat the wastewater of up to 2 million inhabitants and contribute to national efforts to conserve and reuse water. The key environmental features of the ISTP projects include the recycling of wastewater for agricultural activities, the treatment and reuse of sewage sludge for agricultural use as fertiliser, for cement manufacturing, and the use of renewable electricity to power the wastewater treatment plants.
The developer of the ISTPs, ACCIONA, together with its local partners Tawzea and Tamasuk, is a leading company in the development of water and other sustainable infrastructure in Saudi Arabia. The financing structure for the three projects – Madinah-3, Buraydah-2, and Tabuk-2 – incorporates an Islamic tranche for 60 percent of the value of the loans structured as an “Ijara Facility”, or Islamic leasing. The treated water will conserve freshwater resources for farming, with daily water savings expected to contribute directly to the nation’s water security.
ALSO READ: 65,000 foreign employees benefited from Saudi’s labour reforms
Mike Davis, Head of Wholesale Banking ADIB, said, “The financing of these projects is an important part of the development of Saudi Arabia’s environmentally friendly infrastructure. In line with our vision of being a leading innovative Islamic bank, we strive to create a positive impact on society by supporting projects that incorporate Environmental, Social, and Governance (ESG) criteria. We are delighted to be empowering key sectors in the GCC to grow and become more sustainable through impactful finance solution and achieving their sustainability targets.”
The Project Companies developed a Green Finance Framework aligned with Green Finance Principles 2021 developed by the Loan Market Association, the Asia Pacific Loan Market Association, and the Loan Syndications & Trading Associations. Under this framework, the green finance will finance expenditures related to the wastewater treatment projects. (WAM)
