Dubai-headquartered multinational logistics company DP World is looking to invest and expand to new markets in 2024 including the UK, Canada, Indonesia, Tanzania and Senegal. Notably, the possibility of using Islamic financing instruments to fund its expansion plans for the seasoned Sukuk issuer still hangs in the balance, ISFI has learned.
The type of financing DP World will seek will vary from market to market. “There are no specific plans to use Shariah compliant products at this stage,” a spokesperson from DP World told ISFI.
As part of its Asia expansion plans, DP World is ramping up its expansion works on the Sepangar Bay Container Port in Sabah, Malaysia.
The global port operator has been a regular Sukuk issuer, with its most recent issuance being a green US$1.5 billion facility floated in September 2023.
While the company recently made its labeled Sukuk debut, its financing activities in 2023 signaled its strategy to use both Islamic and conventional financing to fund its projects.
Following the issuance of its green Sukuk, DP World signed a US$365.1 million deal in October 2023 with Standard Bank to support its market expansion plans for the African region. The facility did not include an Islamic component, the spokesperson confirmed.
DP World’s financing strategy is to use a diverse range of products in its capital structure including conventional debt, Sukuk, green and hybrid instruments.
The main determining factor for the type of financing for its projects is the availability and pricing of Islamic instruments versus conventional instruments and other available options.
“On this occasion we understood that there was strong liquidity in the Islamic sustainable market, and we decided to tap into that demand,” the spokesperson elaborated on its reasoning for issuing green Sukuk in 2023.
“We have no immediate plans to issue but issuing under a Sukuk format is a preferred method for DP World, especially in the 10-year maturity range.”
Separately, the spokesperson was notably non-committal in their comment on DP World’s strategy to access renewable energy as part of its Asian expansion plans, commenting only that it “will work with partners across the globe to find ways to access renewable energy”.
For context, it has partnered with the Dubai Electricity and Water Authority in its home base, which has resulted in it nearly halving its carbon emissions for the UAE in 2023.