Abu Dhabi (Etihad)
Etihad Airways has raised $1.2 billion in its first ever ESG-related sustainability loan for the global aviation industry. The deal is the largest sustainable financing deal in aviation history, and comes on the heels of two innovative aviation financing deals, the first sustainability-related transformational sukuk in 2020, And the first loan in the aviation sector linked to the United Nations Sustainable Development Goals in 2019.
Adam Boukadida, Etihad Aviation Group Chief Financial Officer, said: “Etihad Airways has been at the forefront of sustainable financing in the sector, and we are proud to continue our innovative track record of being the first airline to receive a ESG loan. The health of our planet and our local communities is the next natural step for our financing strategy.”
He added: “Our goals will have a real impact on the world, and to underscore our accountability, we have committed to impose penalties and incentives of up to $5.5 million linked to our progress against KPIs. Through our Greenliner program, we are ensuring the achievement of multiple sustainability initiatives at Etihad Airways, To improve the environmental footprint of the aviation sector, green finance plays an important and significant role in our strategy.”
The terms of the loan are linked to multiple KPIs, which are in turn linked to the following ESG initiatives, and will be independently evaluated:
Environmental Governance – Reducing the carbon intensity of the passenger fleet, as measured by carbon emissions per tonne kilometer of revenue. As part of its popular Greenliner programme, Etihad Airways has committed to an ambitious goal of zero carbon emissions by 2050 and has set key targets for 2035 and 2025.
Abdul Fattah Sharaf, CEO of HSBC UAE and Head of International Business, said: “HSBC is committed to helping drive the transition to a carbon-neutral economy and we are leveraging financing and accelerating innovation to achieve that goal, working in partnership with our customers to recognize the opportunity to build A more sustainable, resilient and prosperous future.This is our second sustainability-related deal with Etihad Airways, and delivers a strong message that two global companies with pioneering business in the UAE – such as HSBC and Etihad Airways – are committed to working in partnership to find innovative ways to finance the air transport sector. In addition to protecting the planet we live in.”
For his part, Martin Tricaud, Group Head of Investment Banking, First Abu Dhabi Bank, said: “We congratulate Etihad Airways on the successful completion of the Sustainability Goals Loan transaction. Based on its position as the largest bank in the UAE, we are keen to play an active role in supporting environmental, economic and social development in all the markets in which we operate, and we are fully aware of the importance of the opportunities provided by sustainable financing solutions.”