National Bank of Abu Dhabi (NBAD) has deferred plans to launch the region’s first ever green bond after fixed income investors deemed the offered pricing unattractive.

NBAD, the biggest lender in Abu Dhabi by assets, started marketing the benchmark-sized bond, which is usually understood to be worth upwards of $500m, in late August with the proceeds due to be used to invest in renewable energy projects.

“Investor appetite was low and the pricing was not attractive,” news agency Reuters cited a banker familiar with the matter as saying. “It is being re-evaluated,” he added.

A spokesman for NBAD declined to comment.

Another banker said investors were unsure how to price the bond given that NBAD is in the process of merging with First Gulf Bank (FGB) and it could be re-launched. The merger recommended by the boards of both lenders will create the largest banks by assets in the Middle East and Africa.

Green bonds have become an increasingly popular source of borrowing for Asian banks. Several other banks from emerging markets have issued green bonds in recent months, including Bank of China which sold $3bn multi-currency green bond in July, 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.