National Bank of Abu Dhabi plans green bond sale

21 August 2016

Lender will invest proceeds of benchmark-sized bond in renewable energy sector

National Bank of Abu Dhabi (NBAD) plans to issue a benchmark-sized green bond, the proceeds of which would be used to invest in the renewable energy sector.

NBAD, the biggest lender in Abu Dhabi by assets, will start investor roadshows next week for the planned deal, news agency Reuters cited sources familiar with the situation as saying. It has mandated the US’ Bank of America Merrill Lynch, Japan’s Bank of Tokyo-Mitsubishi, France’s Credit Agricole, the US’ Citi, the UK’s HSBC and its own debt capital markets team to arrange the issue. Benchmark-sized generally means at least $500m.

Green bonds have become an increasingly popular source of borrowing for Asian banks, although NBAD’s five-year issue would be the Middle East’s first such transaction. Several other banks from emerging markets have issued green bonds in recent months. Bank of China last month sold a $3bn multi-currency green bond, while in May India’s Axis Bank sold a $500m, five-year green bond.

NBAD earlier this year said it plans to lend $10bn in the next 10 years to the energy sector. The funding will be channelled into renewables projects focused on environmentally sustainable activities.

The commitment to lend supports NBAD’s energy sector research report, which has identified a funding gap of $48 trillion required in the next 20 years to meet global energy demand, with renewables playing a critical role in the energy mix of the future.

NBAD established a dedicated team to look at the sustainable energy business in August last year. The team, run by Nathan Weatherstone, is tasked with evaluating and creating new financing products that will support the development of renewable energy, the lender said in a 10 January statement.

NBAD is in the process of merging with its rival, First Gulf Bank. The merger of the two banks, recommended by their respective boards last month, is expected to be completed in the first quarter of 2017.


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