DP World has issued a groundbreaking $100 million Blue Bond to fund sustainable projects cutting across marine transportation, port infrastructure, marine pollution, as well as nature and water positive initiatives.
Through this issuance, DP World will contribute to closing the significant funding gap for UN SDG 14 (Life below water) and SDG 6 (Clean water and sanitation), as well as increasing transparency to meet investors’ growing interest in blue assets.
This is the first Blue Bond issuance from a company in the Middle East and North Africa, reflecting the company’s aim of leading the logistics sector and region toward a more resilient future. It is also the first corporate Blue Bond out of the broader Central & Eastern Europe, Middle East and North Africa region.
DP World’s 5-year Blue Bond was priced at a 5.25% coupon rate.
Investment management firm, T. Rowe Price Associates, Inc. was the key investor.
The Blue Bond is fully aligned with the DP World’s recently launched Ocean Strategy and long-standing Decarbonisation and Water Strategies. The Ocean Strategy, which encompasses four foundational pillars, links global trade and environmental stewardship, supports the company’s leadership towards a Sustainable Blue Economy and removes barriers to comprehensive climate ocean action. The strategy aims to advance the Paris Climate Agreement and the Kunming-Montreal Global Biodiversity Framework Goals.
Sultan Ahmed bin Sulayem, Group Chairman and Chief Executive of DP World, said: "As a responsible leader in global trade, we are committed to preserving the ocean’s ability to provide for future generations. It is our ambition to lead our industry towards a sustainable blue economy as we work with our partners to remove barriers to comprehensive climate and ocean action. This Blue Bond will lay the foundation for the years to come.”
“We are increasingly working in regions where the ocean is being polluted, coastal biodiversity is being lost, and critical resources like water are becoming scarcer, posing significant threats to both nature and people. This issuance represents DP World’s second foray into the sustainable financing capital markets highlighting our commitment to sustainability and demonstrates our approach towards sustainable business practices.”
Rob Sharps, Chairman, CEO, President of T. Rowe Price Group, Inc., said: “We are proud to partner with DP World on its issuance of the first corporate Blue Bond in the Middle East. This innovative transaction will mobilize capital towards UN SDG 14, Life Below Water, while providing an opportunity for attractive investment returns. We recognize UN SDG 14 as the most underfunded of all the sustainable development goals. We hope this transaction can be a model for other issuers and investors to support the blue economy.”
Philip Brown, Managing Director, Global Head of Sustainable Debt Capital Markets of Citigroup, which advised on the bond, said: “Citi is proud to have supported DP World in arranging this important inaugural Blue Bond issuance under the updated and pioneering Sustainable Finance Framework.”
The Blue Bond spread of 99.6 bps above US treasuries represents DP World’s tightest ever spread in the bond or sukuk market, demonstrating the attractiveness of the issuance.
The eligible projects included within the Blue Bond portfolio, include:
· Sustainable Marine Transportation: Supporting research, development, and procurement of alternative fuels and technologies to reduce carbon emissions, and other sources of marine pollution in the maritime sector.
· Sustainable Ports Development: Funding infrastructure upgrades to minimise environmental impacts, noise and air pollution.
· Marine Ecosystem Conservation and Restoration: Expanding Nature Based Solutions projects to conserve and restore marine ecosystems, and innovations to enhance biodiversity.
· Marine Pollution: Initiatives to tackle waste and pollution in coastal and marine environments, as well as improvements to water quality and ensuring the equitable access to water.
The Bond follows the publication of DP World’s recently enhanced Sustainable Finance Framework, which is aligned with various international standards. The Framework takes into consideration the Guidelines for Blue Finance from the International Finance Corporate and the ‘Bonds to Finance the Sustainable Blue Economy – A Practitioner’s Guide’.
Earlier this year, DP World published its inaugural Green Sukuk Impact and Allocation Report. Of the $1.5bn raised in 2023, $1.17bn has already been allocated to eligible green projects. Projects financed though the Sukuk have contributed to avoiding more than 177 million kg of CO2 emissions, saving 466,057 MJ of energy and generating 866,686 kWh of renewable energy.
