ADIB joins 4 banks in Saudi Arabian green finance deal; Allocates $61mn

By Amirtha P S, Desk Reporter
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Abu Dhabi Islamic Bank (ADIB), UAE’s leading financial institution, has revealed the allocation of $61 million to fund green-certified projects in Saudi Arabia.

In association with MUFG, Alimna Bank, Riyad Bank and Siemens Bank, $480 million worth 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 line with Saudi Arabia Vision 2030’s blueprint for sustainable development and economic diversification, the three ISTPs, Madinah-3, Buraydah-2, and Tabuk-2,  will treat the wastewater of up to 2 million inhabitants and contribute to national efforts to conserve and reuse water. 

The main environmental features of the three projects include the recycling of wastewater for agricultural activities, the treatment and reuse of sewage sludge for agricultural use as fertilizer, for cement manufacturing, and the use of renewable electricity to power the wastewater treatment plants. The treated water will conserve freshwater resources for farming, with daily water savings expected to contribute directly to the nation’s water security.

Mike Davis
Mike Davis
Head – Wholesale Banking

“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 solutions and achieving their sustainability targets.”

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 incorporates an Islamic tranche for 60 percent of the value of the loans structured as an ‘Ijara Facility’ or Islamic leasing. 

The Project Companies developed a Green Finance Framework aligned with Green Finance Principles 2021, created by the Loan Market Association, the Asia Pacific Loan Market Association, and the Loan Syndications & Trading Associations. Under this framework, green finance will fund expenditures related to wastewater treatment projects.

Related: UAE’s ADFD completes $544mn funding for global water projects