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Thu 12 Mar 2015 02:27 PM

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UAE set to offer first sukuk to fund green energy projects

A sukuk intended for green energy projects could be issued in the UAE as soon as April - report

UAE set to offer first sukuk to fund green energy projects

The UAE is expected to issue the world’s first Sharia-compliant bond to finance renewable energy projects.

A sukuk intended for green energy projects could be issued in the UAE as soon as April.

“We are going to get one, possibly two [green sukuk] in the UAE in April,” Sean Kidney, the chief executive and co-founder of London-based Climate Bonds Initiative (CBI), told The National newspaper.

Green bond issuance reached $36.6 billion globally last year and at least $50bn of green bonds are forecast to be issued this year – although Kidney said he expects numbers to hit $100bn.

According to the World Bank green bonds are “fixed income, liquid financial instruments that are used to raise funds dedicated to climate change mitigation, adaptation and other environmentally friendly projects.

The National quoted Andy Cairns, managing director of debt origination and distribution at National Bank of Abu Dhabi, as saying the bank is currently in discussions with potential issuers. “I am optimistic that we will see the first green issuance out of the region and into the region during this year.”

He said green bonds were attractive to issuers as they target socially responsible buyers while also appealing to the conventional investors.