Abu Dhabi bank planning Middle East’s first green bond

Acting on its $10bn clean energy commitment in January, National Bank of Abu Dhabi could be seeking to raise at least $500m.

The National Bank of Abu Dhabi (NBAD) is planning to issue what could be the Middle East's first green bond.

NBAD said the issuance will primarily be allocated to renewable energy projects in its region of operation. The green bond will have a five-year maturity and will be benchmark-size, according to reports, which usually means at least $500 million. The Abu Dhabi bank said it will publish an annual update on where the proceeds are going.

Green bonds are a type of debt security that is being increasingly used to raise money for climate-friendly projects. Bank of America Merrill Lynch, Bank of Tokyo-Mitsubishi, Credit Agricole, Citi and HSCB are arranging NBAD's issuance.

In January, NBAD committed to invest $10 billion in clean energy projects over the next 10 years. The lender has since formed a sustainable business team to find clean energy and sustainable financing opportunities from West Africa to East Asia, focusing on renewable energy, clean transportation, sustainable water, waste management and energy-efficient real estate.

“We believe that even in the current climate of low oil prices, the transition towards more renewable sources in the energy mix will continue because the underlying drivers are long term and strong,” NBAD chief executive Alex Thursby said at the time.

NBAD is in midst of a merger with First Gulf Bank PJSC which, when complete, will create the Middle East and North Africa's largest bank with $175 billion of assets.