Page 63 - October 2022 Issue 611 Part 1

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Top 12 ESG-linked Financial deals in MENA
– Turkey region by The Amdeya Group

What are the top 12 Environmental, The list shows that Egypt was able to

Social, and Governance (ESG) financial secure a $3 billion mixed-use loan in
deals in the MENA - Turkey Region in the late 2021. The loan was originally
last two years? What are their distinguish- expected to be $2 billion but was over-
ing aspects? How do they reflect the huge subscribed.
demand for ESG finance in the region? To

answer these questions, Amdeya Group IsDB raised $2.5 billion in

which is specialized in advice to banks Sustainability Sukuk. The proceeds of
and financial institutions and their corpo- the Sukuk have been allocated to
rate clients on performance enhance- finance green (10%) and Social (90%)
ment, implementation of roadmaps, real

estate portfolio management, strategy, projects.

process efficiencies, restructurings, acqui- Emirates NBD secured the region’s

sitions, and technology implementation, WALID ALAMEDDINE first sustainability linked syndicated
published a survey which gives details loan of $1.75 billion. It has linked sus-

about the top 12 ESG-linked financial tainability metrics to the loan. These

deals in MENA and Turkey. The list has been compiled by Amdeya’s included gender diversity in top management roles and water
ESG team while conducting a comprehensive survey of ESG report-
ing in more than 700 banks in 41 countries. All banks in MENA and conservation.

Turkey were surveyed and the size of the deals indicates very large The Saudi Electricity Company issued the first green sukuk for

demand for ESG-linked finance in the region. Other banks surveyed KSA in the international market in late 2020. This was a $1.3 bil-

were in Africa, Central Asia, Latin America, and South East Asia. lion sukuk split into two equal $650 million transactions due in

According to the presentation, the first ESG financial deals in MENA 2025 and 2030.
and Turkey have all been very successful and relatively large, indi- Al Rajhi was mandated lead arranger and hedge provider for
cating that all these pioneering deals were oversubscribed and the the finance package of the Sudair Solar I.P.P. The financing was
pricing of almost all these deals went down during the subscription in August 2021. The deal value is $925 million.
period. This reflects the strong demand for ESG-linked financial

instruments by regional and international investors and banks. Saudi National Bank issued a $750 million ESG-linked bond in

Amdeya stated that some of the deals are clearly balanced deals January 2022. Demand topped $3.2 billion, and resulted in

from an ESG perspective. This is because they included more than reduction of pricing to 85 basis points.
one element in ESG and not only Environmental ones. Riyad Bank issued a $750 million AT1 (Additional Tier 1)
Amdeya noted that banks and companies in MENA – Turkey need to Sustainability sukuk in February 2022. This issue was 4.3 times
develop their ESG programs and ESG reporting because this would oversubscribed, with demand peeking at $3.2 billion.
improve their access to finance, and get them better interest rates on APICORP issued a $750 million first-ever “green bond” issued
their borrowings. This is evidenced by the high demand for ESG finan-

cial instruments in Mena – Turkey, as reflected by the oversubscriptions by an energy-focused financial institution. The bond was three-

of ESG-linked bonds/loans in the last two years, and the reduced pric- times oversubscribed by both regional and global investors.

ing of these deals. Moreover, Amdeya stated that all the ESG-linked The Sweihan PV Power company issued a $700 million green
financial deals need to be independently verified for adherence to ESG project bond. The project includes construction, operation and
criteria during their lifetime as most of these deals have international maintenance of 1,177 MW solar power plant.
investors who are subject to strict regulations by their supervisors.

Gulf International Bank secured in late 2021 a $635 million sus-

The top 12 ESG financial deals in the MENA – Turkey region tainability-linked syndicated loan, which increased from

an original $500 million due to strong demand. The

loan was oversubscribed and attracted orders worth

$1.1 billion.

The Turkish subsidiary of Kuwait Finance House issued

a $350 million ESG Tier 2 Sukuk issue. It was 12.5

times oversubscribed as it was the world’s first ESG

Tier 2 issue.

Akbank, one of Tukey’s leading banks, partnered with

Deutsche Bank to structure the successful execution of

its first ESG-linked repurchase agreement transaction

globally. The 300 million US dollar transaction is also

the first time ESG and sustainability targets have been

attached to interbank financing in repo format in

CEEMEA.

63 AL BAYAN ECONOMIC MAG - ISSUE 611 - OCTOBER 2022