The company said in a statement that the ten-year green sukuk profit rate was set at 4.875%, which is one of the lowest profit rates of any corporate issue in 2023.
As a result, Aldar Real Estate Investment Company’s actual funding cost will be well below the market average thanks to the successful proactive hedging strategy implemented in 2021 and 2022 when long-term interest rates were very low. . Forward contracts executed by the company will reduce the effective profit rate of the issue to 3.85%, according to the company’s statement.
The sukuk issuance came after successful promotional meetings with international investors, which resulted in demand exceeding four times the supply volume, amid strong demand from a wide range of local investors. , regional and international, with a total order value of over $2.3 billion.
She explained that these sukuk are part of a $2 billion financing program launched by Aldar Real Estate Investment to support its growth plans and implement its sustainable initiatives in line with the objectives of the Paris climate agreement. and the UAE’s strategic initiative to achieve climate neutrality by 2050. and Aldar’s plan to achieve net zero emissions to become a zero carbon company by 2050.
The company pointed out that the proceeds from the issuance will be used in accordance with Aldar Properties’ green financing framework, which guides the company’s investments in green projects such as green buildings, retrofitting existing assets to improve their efficiency. energy efficiency, sustainable water management, the implementation of effective pollution control measures and the use of renewable energy sources.
In this regard, Faisal Falaknaz, Acting Chief Financial Officer and Head of Sustainability at Aldar Properties, said: “This issuance marks Aldar’s return to global capital markets for the first time since 2019, and it is the first standard issue of sukuk issued by a company. in Abu Dhabi since 2020. This is also Aldar’s first green issue, and the strong investment demand for our first green sukuk reflects the level of confidence in Aldar’s approach to environmental governance, social and corporate and in our business model which supports our commitment to achieving net goals. zero emissions.As an integrated real estate development, investment and management company, Aldar believes in its responsibility to align “Its activities align with national aspirations to achieve climate neutrality. The company invests heavily in financing efficiency measures across our real estate portfolio, and our green finance initiatives are now enabling us to accelerate our climate action program and efforts.”
Aldar Real Estate Investment Company, which stands out for its diversified portfolio of real estate assets generating recurring income, amounting to more than 23 billion dirhams, benefits from a solid investment grade credit rating (Baa1) by Moody’s Agency .
In addition, Aldar’s progress in the area of ​​sustainability has been reflected in a recent improvement in its ratings in the area of ​​environmental, social and corporate governance practices. ESG risks, indicating a low level of risk associated with the environment, social and corporate governance practices.
Finally, Aldar earned a score of 60 on the Dow Jones Sustainability Index, placing it among the top 7% of the 237 global real estate companies invited to participate in the Dow Jones Sustainability Index survey.
Aldar Properties has adopted a green finance framework consistent with the United Nations Sustainable Development Goals and based on the principles of the International Capital Markets Association (ICMA) and the Loan Market Association.
The framework defines criteria for the use of revenue and is led by Aldar’s Sustainability Council, which includes members of senior management and is chaired by the Director of Sustainability and Corporate Social Responsibility.
In line with industry best practices, Aldar has obtained a “second opinion” from the Science Foundation, which independently confirms the quality of its framework in terms of its commitment to sustainability best practices and its consistency with the principles of green finance.
Aldar launched its net zero emissions plan in January 2023, committing to become a carbon neutral company with “net zero emissions” in greenhouse gas emission scopes 1, 2 and 3 of here 2050.
The company has set a set of interim emission reduction targets for the year 2030 in accordance with climate science, according to which the company will achieve net zero greenhouse gas emissions in scopes 1 and 2, with a 45% decrease in intensity. greenhouse gas emissions within Scope 3, according to the company’s environmental footprint benchmark in 2021.
The Net Zero Emissions Plan identifies the mechanisms used to achieve the home’s desired goals in terms of reducing carbon emissions, whether direct emissions or carbon emissions resulting from its development projects, as well as as emissions related to its supply chain operations and tenants.
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