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Green Finance Achieves a New Milestone in the Middle East

20/11/2018

Masdar's deployment of green financing options previously unseen in the region is advancing the sustainability agenda.

Masdar, the United Arab Emirates-government-owned investor in global clean technology and sustainable real estate, has signed a green revolving credit facility, the first in the Middle East and the latest example of the UAE's commitment to sustainability. The loan will be used for general corporate purposes as per the core business of Masdar, supporting both the diversification of the UAE economy and energy sources for the benefit of future generations.

By deploying new financing tools, Masdar is paving the way for other local and regional borrowers to consider such commitments through its credit facilities and contribute to the country's 2050 energy goals. The UAE aims to increase the contribution of clean energy in the total energy mix from 25% to 50%, reduce the carbon footprint of power generation by 70%, and boost consumption efficiency of individuals and corporates by 40%.

The creation of Masdar in 2006 – pioneering in itself, as an oil-rich nation championing clean energy – has made the UAE a regional leader and a major international player in renewable energy and sustainable urban development. The country is also home to the world's largest single-site solar park. The first green bond in the Middle East was issued by a UAE-based bank.

The Masdar loan is the latest milestone in Societe Generale's longstanding support of the UAE's goals and demonstrates the bank's ongoing commitment to sustainable finance. Societe Generale was a mandated lead arranger and bookrunner for the three-year facility, which includes a number of ‘green features' designed to support environmentally sustainable economic activity. Masdar is committed to report annually on its performance against sustainability targets which include displacement of carbon dioxide emissions, electricity generation from renewable energy sources, and the amount of carbon dioxide emitted during the manufacture, transport and construction of building materials.

We are thrilled to accompany Masdar on this historic transaction. It is a continuation of our strong support for Masdar and of Societe Generale Group's ongoing efforts to support clients committed to environmental and social values as well as a long-term and ambitious CSR strategy.

Zulfiqar Khan,
Senior Banker and Head of Corporate Coverage for the Middle East, Dubai and UAE at Societe Generale

Our new green facility provides liquidity for general corporate purposes and shows that Masdar is establishing greater independence and greater financial discipline in line with its growth strategy. This is the first time we have secured borrowing at the corporate level, separately from Mubadala, and allows us to be more agile and responsive.

Niall Hannigan,
Chief Financial Officer, Masdar