FAB Leads Gulf with $50m Blue Bonds for Sustainable Finance

The UAE is one of the many countries that signed the Paris Agreement, legally binding the entire country to reach net zero by 2050.

First Abu Dhabi Bank (FAB), supported by Crédit Agricole Corporate and Investment Bank, has issued a US$50m five year Blue Bond – used to finance projects with a positive impact on marine and ocean environments.

This makes the bank the first ever issuer of a Blue Bond in the Gulf Countries, which FAB says cements the company's leadership in sustainable finance.

Shargiil Bashir, Chief Sustainability Officer at FAB said: ‎"This Blue Bond issuance is a defining milestone for FAB and a first for any financial institution ‎in the Gulf. 

"It reflects our conviction that banks must do more than finance the future and we ‎must actively shape it with the tools available to us."

FAB's Strategy in Sustainable Finance

The investment aligns with FAB’s Sustainable Finance Framework and follows the International Capital Market Association Green Bond Principles.

FAB’s Blue Bond issuance was facilitated through a private placement, representing a concerted effort in seeking out blue-labelled financial instruments.

The initiative targets endorsing the UAE Water Agenda 2036, thereby fostering innovation in marine ecosystem sustainability.

Furthermore, the investment aligns with the UAE's broader environmental strategies as the country prepares to host significant events like the International Union for Conservation of Nature in 2025 and the United Nations Water Conference in 2026.

Eligible projects under the Blue Bond include:

• Sustainable water management 
• Climate change adaptation projects
• Sustainable management of fisheries and aquaculture
• Conservation of terrestrial and aquatic biodiversity

Shargiil continues: “By directing capital to protect vital water ‎resources and marine ecosystems, FAB is setting a precedent for sustainable finance in the ‎region.

“This marks another achievement in our journey to drive sustainable development in ‎the UAE and beyond and it also reinforces the nation’s global leadership on climate and ‎biodiversity, as it prepares to host two major summits, the IUCN Congress in Abu Dhabi and the ‎UN Water Conference in 2026 and we are privileged to be at the forefront of this critical ‎transition.”

Understanding the Impact of Blue Bonds

FAB highlights that Blue Bonds are a developing category in sustainable finance, concentrating on water-related environmental aims.

Much like green bonds, these funds cater to projects intended to meet marine and ocean sustainability objectives.

The International Finance Corporation outlines that Blue Bonds raise capital to invest in water and wastewater management, reduction of oceanic plastic pollution, restoration of marine ecosystems, sustainable shipping, eco-friendly tourism and renewable energy.

This area of sustainability has historically been underfunded despite global significance, according to FAB.

Tanguy Claquin, Global Head of Sustainability, Crédit Agricole Corporate and Investment Bank, says: "Crédit Agricole CIB is proud to support First Abu Dhabi Bank as Sole Dealer on this landmark ‎Blue Bond – a signal of the region’s increasing focus on aligning financial innovation with ‎global environmental priorities. 

"First Abu Dhabi Bank continues to set an ambitious standard ‎and pace for sustainability in the Middle East and this transaction reflects the growing ‎appetite from global asset managers to direct capital towards new frontiers in sustainable ‎finance, such as the blue economy, nature and biodiversity."

Future Steps Towards Sustainability

FAB remains committed to its environmental goals, pledging investment in efforts aligned with the UAE’s net zero target by 2050, as part of the Paris Agreement.

In 2021, FAB became a member of the Net-Zero Banking Alliance, aiming to assist clients in their journey towards a climate-neutral economy by providing financial and advisory services.

As an active member of the Steering Group within the alliance, FAB now chairs it, playing an integral role in strategy and decision-making.

FAB targets lending and investing US$75bn by 2030 towards sustainable business, along with an additional US$10bn by 2026 in sustainable activities.

To lower its carbon emissions, FAB is reducing Scope 1 and 2 emissions through decarbonization strategies including enhancing energy efficiency, adopting renewable energy sources, utilizing electric vehicles and implementing carbon offsetting.

Shargiil says: “As the largest bank in the UAE, FAB has taken decisive steps as a regional pacesetter in the financial industry to bind both ambition and action together to accelerate the pace of positive environmental change. 

“As the first bank in the MENA region to have committed to a target of net-zero emissions by 2050, we're making advances across our own operations in addition to walking alongside our clients as their strategic partner to ensure they can achieve their climate goals.”

The bank has previously called for global commitment to meaningful emissions reductions.