The OPEC Fund for International Development priced its inaugural benchmark bond issue in the capital markets on Wednesday. The bond was priced using its Sustainable Development Goal (SDG) bond framework on which Credit Agricole CIB acted as sole sustainability advisor.

Attracting strong demand from investors globally, the 3-year fixed-rate sustainability bond raised US$1 billion, which will be used to finance or refinance key sustainable development projects that are aligned with the OPEC Fund’s multi-sectoral development mission and directly contribute to achieving the SDGs.

The bond attracted very broad interest with 52 percent of investors coming from Europe, Middle East and Africa (EMEA), 27 percent from Asia-Pacific (APAC) and 21 percent from North America (NAM). In terms of investor type, central banks & official institutions accounted for 62 percent, banks 19 percent, asset managers 9 percent and insurance/pension funds for 8 percent.

Dr. Abdulhamid Alkhalifa, OPEC Fund Director-General, said, “The robust demand for our inaugural benchmark is testament to the confidence that investors have in the OPEC Fund and our long-standing development-focused mandate. It also confirms the appetite for sustainable investments globally. At a time when there is an increasing need for development finance, the OPEC Fund is proud to have achieved this milestone. It will allow us to mobilise additional funds in support of our partner countries. The OPEC Fund has a 47-year track-record in delivering successful development outcomes and the additional funds will enable us to further deepen our impact.”

The OPEC Fund is financing development projects in low- and middle-income countries in line with its South-South cooperation mandate. The bond proceeds will be allocated according to the specific criteria defined in the SDG Bond Framework focusing on food security, healthcare, infrastructure, education, employment and renewable energy. The Framework is aligned with the Sustainability Bond Guidelines 2021, Green Bond Principles 2021 and Social Bond Principles 2021 published by the International Capital Market Association (ICMA) and has received a positive opinion from the Second Party Opinion Provider Sustainalytics.

The success of the debut benchmark bond was supported by the OPEC Fund’s AA+ (Stable) rating from Fitch Ratings and AA (Positive) from S&P Global Ratings, which reflect the Fund’s prudent financial risk profile, excellent capitalisation, conservative liquidity and risk management, preferred creditor treatment as well as diversified portfolio of purpose related assets.

Tarek Sherlala, OPEC Fund Assistant Director-General, Financial Operations, added, “These increased financial resources will enable us to step up delivery in partner countries and help boost our development impact. The support of global investors will add to our credit strength and move us to a new phase in our delivery of impactful and sustainable development cooperation.”

Martine Mills, OPEC Fund Head of Funding, said, “This bond pricing is a major milestone for the OPEC Fund and the culmination of several years of intensive work. The success of our debut bond in the current market environment is a testament to the strength of our credit. We are pleased to join the community of multilateral development banks issuing in the capital markets. This is an important step in the establishment of our borrowing programme and we look forward to continuing our engagement with investors going forward.”

Dr. Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology, and UAE Special Envoy for Climate Change, has said that the declaration of 2023 as the ‘Year of Sustainability’ reflects the UAE’s commitment to promote sustainability in all fields and sectors, and paves the way for the country’s efforts to accelerate global climate action ahead of COP28.

In a statement issued today, Dr. Al Jaber added that the UAE has long maintained that the principles of sustainability must be incorporated into every sector of the economy. “The country’s commitment to sustainability was led by its founding father, Sheikh Zayed bin Sultan Al Nahyan, and this commitment remains a guiding light for the current leadership.”

The ‘Year of Sustainability’ will culminate in the most important climate event of the year, COP28 UAE, which will take place at Expo City Dubai from 30th November to 12th December, 2023.

Sultan Al Jaber continued, “The UAE will strive to make COP28 one of solidarity and action. It will listen, engage, and build partnerships with all parties who seek to play a constructive role in the clean energy transition. It will bridge the global north and south and include public and private sectors, scientists and civil society, women and youth. And it will raise ambitions and move from goals to concrete action.”

He concluded, “The ‘Year of Sustainability’ offers a reminder of the need for innovation across all sectors to drive inclusive and transformational development—and of the important role that the UAE must play to create this future.”

• Aldar’s Net Zero Plan is a first of its kind in terms of depth of detail and breadth of scope
• The Plan includes a detailed roadmap to achieve Net Zero in Scope 1, Scope 2 and Scope 3 emissions by 2050
• The Net Zero commitment encompasses Aldar’s operational emissions, the embodied carbon of its developments and projects, and emissions associated with its supply chain and tenants
• By 2030, Aldar will already be Net Zero in its Scope 1 and Scope 2 emissions, with a 45% reduction in the intensity of its Scope 3 emissions relative to its own 2021 baseline
• Aldar will work closely with all stakeholders – including government, utilities providers, suppliers, and customers – to drive transition to Net Zero  

Aldar Properties PJSC (“Aldar”) has today launched its Net Zero Plan (the “Plan”), with a commitment to becoming a Net Zero carbon business (“Net Zero”) across its Scope 1¹, Scope 2, and Scope 3 greenhouse gas (“GHG”) emissions by 2050, in line with the goals of the Paris Agreement and the UAE Net Zero by 2050 Strategic Initiative. 

Aldar has also set science-aligned 2030 interim targets, which will see it achieve Net Zero in its Scope 1 and Scope 2 GHG emissions and deliver a 45% reduction in the intensity of its Scope 3 GHG emissions relative to the company’s 2021 baseline.

Aldar’s Net Zero Plan explains how it will achieve Net Zero in its direct emissions and the embodied carbon of all its developments and projects, as well as emissions associated with its supply chain and tenants. By launching this Plan, Aldar is taking a leading position on the global transition to Net Zero and is underlining its commitment to helping control the effects of climate change. 

Talal Al Dhiyebi, Group Chief Executive Officer of Aldar Properties, said: “As one of the UAE’s largest real estate developers and managers, and with a growing presence across the wider Middle East, Aldar is committed to not only supporting the UAE Net Zero by 2050 Strategic Initiative but also leading climate action in our industry and region. Our Net Zero Plan will drive deep and rapid change across all our lines of business and throughout our supply chain. It will transform our approach to design, supply chain management, construction, operations, and asset management. Our plan is comprehensive, ambitious, and based on science – matching leading global real estate industry benchmarks and setting a new standard for the region in its depth and detail.”

The nature of Aldar’s business as a developer and asset manager – with a diversified portfolio spanning retail, residential, commercial, hospitality, logistics, and schools – means Aldar is in a unique position to transform assets across their entire lifecycle, which is why it has taken a whole building approach and incorporated Scope 3 tenant-controlled emissions into its commitment.

Partnerships and engagements will be fundamental to the success of Aldar’s Net Zero Plan. The Company will work extensively with suppliers to decarbonise materials and operational emissions, while working with commercial tenants and owner associations to drive sustainable asset operation. Accessing clean energy is critical to Aldar’s Net Zero Plan, so Aldar intends to work with utilities providers to source low-carbon energy as the grid decarbonises in line with the UAE Net Zero by 2050 Strategic Initiative. Aldar will also work with government entities to develop necessary regulations and foster fair competition for construction partners on decarbonisation pathways.

Delivering Aldar’s Net Zero Plan 

The company has identified eight decarbonisation focus areas that span the whole lifecycle of its assets. 

1. 1. Low carbon design: Aldar will create an Aldar Sustainable Design Standard to embed low carbon active and passive design options, maximising energy efficiency, building performance, and asset climate resilience. This will include taking measures to:
2. 2. Low carbon supply chain: Aldar will incentivise its supply chain to innovate around low carbon products, materials, and manufacturing processes. Aldar will engage its supply chain to:
3. 3. Green construction: Aldar will take a whole lifecycle approach to assets that prioritises low carbon site practices and construction material procurement. This will include:
4. 4. Clean energy: Aldar will prioritise the use of clean energy through grid decarbonisation and procuring clean energy through market-based mechanisms or instruments. This will involve:
5. 5. Resource efficiency and management: Aldar will upgrade its systems to reduce leakage and improve asset efficiency. This will involve:
6. 6. Tenant initiatives: Aldar will develop a programme of tenant engagement regarding all leased and managed assets, offering guidance and incentives for more sustainable behaviours. This will include:
7. 7. Circular economy: Aldar will look to enhance waste management during the design, build, and use phases, prioritising diversion from landfill, increasing greywater recycling and supporting the local waste sector. This will include:
8. 8. Sustainable acquisitions: All new investments and acquisitions will be guided by criteria that formally integrate sustainability considerations into the end-to-end investment decision making process. This means Aldar will:

Reporting and tracking progress 

Aldar has set both near and long-term GHG emission reduction targets, which align with the latest guidance on climate science. Aldar will seek independent validation of its targets once the Science Based Targets Initiative (“SBTi”) publishes its guidance for the buildings sector in late 2023, at which point Aldar will also review its Net Zero targets to ensure they meet the criteria, particularly with regards to Scope 3 GHG emissions. Aldar is already a member of SBTi’s Expert Advisory Group for the buildings sector.

Progress towards targets will be reported each year as part of Aldar’s annual Sustainability Report, while targets will be reviewed for relevance to its business and best practice alignment. Aldar will be transparent on progress and with regards to how it deals with technical challenges related to issues such as neutralisation of residual emissions.