The Abu Dhabi Islamic Bank (ADIB) has revealed the provision of $61 million in financing for green-certified projects in Saudi Arabia.
In collaboration with MUFG, Alimna Bank, Riyad Bank, and Siemens Bank, $480 million of green finance has been allocated for three independent sewage treatment plants (ISTP) in Saudi Arabia.
ADIB acted as mandated lead arranger, hedge provider, and Islamic finance agent for this transaction.
In line with Saudi Arabia’s Vision 2030 – which is the kingdom’s blueprint for sustainable development and economic diversification – the three ISTPs will treat wastewater of up to 2 million inhabitants, and will contribute to the nation’s efforts to conserve and reuse water.
The key environmental features of the ISTP projects include the recycling of wastewater for agricultural activities, the treatment and reuse of sewage sludge for agricultural use as fertiliser and for cement manufacturing, as well as the use of renewable electricity to power the wastewater treatment plants.
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 – Madinah-3, Buraydah-2, and Tabuk-2 – incorporates an Islamic tranche for 60 percent of the value of the loans structured as an “Ijara Facility”, or Islamic leasing.
The treated water will conserve freshwater resources for farming, with daily water savings expected to contribute directly to the nation’s water security.
The head of Wholesale Banking at ADIB, Mike Davis (above), said: “The financing of these projects is an important part of the development of Saudi Arabia’s environmentally friendly infrastructure.
“In line with our vision ofa 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.
Davis added: “We are delighted to be empowering key sectors in the GCC to grow and become more sustainable through impactful finance solution and achieving their sustainability targets.
The project companies developed a Green Finance Framework aligned with the Green Finance Principles 2021, developed by the Loan Market Association, the Asia Pacific Loan Market Association, and the Loan Syndications & Trading Associations. Under this framework, the green finance will finance expenditures related to the wastewater treatment projects.—Arabian Business
