Aldar Properties has signed a Dh300 million facility with HSBC which links the interest margin payable under the facility to the achievement of sustainability goals.
It thus became the first real estate company in the MENA region to enter into a financing agreement linked to sustainability.
The five-year sustainability loan includes a mechanism to adjust Aldar’s interest margin each year based on the achievement of energy and water intensity, waste recycling and worker well-being targets.
The loan will be used for general corporate purposes, including the deployment of ESG initiatives across the group.
As part of the deal, Aldar also pledged to invest a fixed amount in one or more eligible environmental, social and governance (ESG) projects if it does not meet agreed annual targets, according to the agency. state press. WAM.
The transaction is structured in accordance with the Sustainability Lending Principles (SLLP) published by the Loan Market Association (LMA), the Asia Pacific Loan Market Association (APLMA) and the Loan Syndications & Trading Association (LSTA).
Last year, Aldar launched a sustainability strategy focused on improving the way it does business and ensuring the business has a positive impact on the economy, the environment, people. and the communities in which it operates.
Aldar’s main sustainability commitments for 2021 include the introduction of a Sustainability Data Management System (SDMS) to improve the availability and quality of sustainability data across the country. business. It also supports the Task Force on Climate-related Financial Disclosures (TCFD). Aldar is also prioritizing the development of an energy efficiency plan to significantly reduce energy consumption in 87 assets as well as a new waste management plan.
“Our financial stakeholders are increasingly integrating sustainability assessments into their portfolio strategies. At Aldar, we believe this shift in capital allocation is a positive force that creates a powerful incentive for companies to improve their sustainability game in order to benefit from these capital flows. As a leader in our market, Aldar is uniquely positioned to benefit from this trend, ”said Greg Fewer, Group Chief Financial Officer and Sustainability Officer at Aldar.
Mohammed Al Marzouqi, Head of Global Banking Services at HSBC UAE, added: “The real estate sector plays an important role in helping the world tackle climate change, given that up to 70% of a large city’s emissions are linked to its buildings. By securing the first facility that complies with the LMA Sustainability Lending Principles in the MENA region’s real estate sector, Aldar not only demonstrates its commitment to addressing these relevant ESG issues in the sector, but also sets an important precedent in the region.
Aldar Properties announced a 17% increase in turnover to Dhs8.39bn for 2020. Its gross profit in 2020 also increased by 8% to Dhs2.98bn. Its net profit for the whole year slightly decreased by 2.5%, from 1.98 billion Dhs in 2019 to 1.93 billion Dhs for 2020.
In January, Abu Dhabi signed deals with Aldar worth $ 12.3 billion. As a result, Aldar was entrusted with the management of Dhs30bn of developments and the supervision of projects worth Dhs10bn in the fields of education, health and infrastructure. He was also tasked with managing Dh5 billion of projects that were awarded by the government in 2019. Earlier this year, with Aldar Properties recording a 144% year-over-year increase in its share price, the wealth fund Abu Dhabi Mubadala sold $ 950. m stake in Aldar.
Read: Mubadala takes advantage of 144% stock market rally to sell stake in Aldar Properties