DP World Crescent, an SPV of Dubai-based logistics company DP World, issued a 10-year green Sukuk facility worth US$1.5 billion on the 6th September this year. Based on the Wakalah concept, DP World’s inaugural green Sukuk will finance the company’s green, social and sustainable projects.
According to White & Case, the legal advisors for the dealers of the facility, the issuance was well received, demonstrating the appetite for innovative and sustainable Sukuk in the domestic UAE, GCC and international markets.
On the 13th September, the facility was listed on the London Stock Exchange, along with its previous issuances under its US$5 billion Sukuk program.
The issuer’s social impact portfolio includes its international marine and inland terminal operations, maritime services, maritime transport, industrial parks, economic zones, logistics and ancillary services and technology-driven trade solutions.
DP World also has a portfolio contributing to positive environmental impact including the management of international marine and inland terminal operations, maritime services, maritime transport and industrial parks.
Notably, the sizes of the social impact and environmental impact portfolios contributing to various SDGs are not clearly determined due to a lack of data.
Under DP World’s Sustainable Finance Framework, the proceeds from its sustainable issuances will be channeled toward clean transportation, green buildings, energy efficiency, renewable energy and socioeconomic advancement projects.
As part of DP World’s decarbonization strategy, it will also be purchasing carbon credits and nature-based solutions including blue carbon initiatives under its Ocean Enhancement Programme.
Under the Sustainable Finance Framework, the issuer will limit the use of carbon credits to 5% for its long-term target of reaching net zero. Further, carbon credits will play no role in achieving its near-term target to achieve a 28% reduction in carbon emission.
It is worth noting that ISS Corporate Solutions (ISSCS), which provided the second-party opinion for DP World’s Sustainable Finance Framework, does not consider carbon credits as valid reduction measures.
Given that DP World has committed to reducing 70% of its actual greenhouse gas emissions and offsetting the remaining 30% as part of its plan to be carbon-neutral by 2040, ISSCS considers carbon reduction core to its framework.
“The company will exercise its judgment and sole discretion in determining the businesses and projects that will be financed by the proceeds,” the issuer, which does not guarantee the proceeds of the green facility, remarked.
|
DP World’s Inaugural Green Sukuk US$1.5 billion  6th September 2023 |
|
| Summary of terms and conditions | |
|
Issuer |
DP World |
|
Size of issue |
US$1.5 billion |
|
Purpose |
To finance eligible green, social and sustainable projects. |
|
Tenor |
10 years |
|
Profit rate |
5.5% |
|
Currency |
US dollar |
|
Maturity date |
16th September 2033 |
|
Principal advisor(s) |
Citigroup, Dubai Islamic Bank, First Abu Dhabi Bank, JPMorgan, Deutsche Bank, Emirates NBD Capital, HSBC |
|
Dealer(s) |
Citigroup, Dubai Islamic Bank, First Abu Dhabi Bank, JPMorgan, Deutsche Bank, Emirates NBD Capital, HSBC, Standard Chartered Bank |
|
Governing law |
English law |
|
Legal advisor(s)/council |
Clifford Chance, on behalf of the issuer. White & Case, on behalf of the dealers. |
|
Islamic structure |
Wakalah |
|
Listing |
London Stock Exchange |
|
Underlying asset |
Shariah compliant assets |
|
Rating |
‘Baa2’ by Moody’s Investors Service, ‘BBB+’ by Fitch Ratings |
|
Shariah advisor(s) |
Shariah advisory boards of Citi Islamic Investment Bank, Khalij UK, Dubai Islamic Bank, Emirates NBD, First Abu Dhabi Bank, HSBC Bank Middle East, JPMorgan Securities and Standard Chartered Bank |