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Emirates NBD will extend an AED 183.65 mn sustainability-linked loan (SLL) to infrastructure firm Sidara (formerly Dar Group), according to a Dubai Media Office statement. This agreement marks Sidara’s first sustainability-linked loan.
The loan will fund Sidara’s working capital requirements, including its efforts towards meeting net-zero targets, by “tying financial incentives to its sustainability performance,” the statement said, without clarifying the exact nature of the incentives.
SOUND SMART- SLLs link loan interest and fees to the borrower’s performance in meeting predetermined sustainability targets. A lender might reduce interest rate margins if the borrower checks off agreed-upon emission targets or upcharge them if they don’t. Before inking the agreement, the parties typically hash out the targets and performance measurement indicators.
Not the first SLL that Emirates NBD has handed out: The Dubai-based bank raised AED 6.43 tn (USD 1.75 bn) for the GCC’s first loan back in March 2021, Bloomberg reported previously. The loan saw participation from nearly 20 banks and linked sustainability metrics, including water conservation and gender diversity in top management roles, with the payouts. In December, the bank also signed an agreement with UAE-based luxury retailer Chalhoub Group for the firm’s first loan, although the value of the loan was undisclosed.
Background: London-based Dar Group recently rebranded to Sidara, a holding firm with 17 brands under its belt, including Middle East-focused Dar. The company has worked on projects like Doha Hamad International Airport, Al Wasl Plaza at Dubai’s Expo 2020, and the University of Dubai.
