Global ports operator DP World has raised $1.5 billion in a green sukuk issuance to fund its global decarbonisation projects as it seeks to align its financing strategy with its sustainability efforts.
The Islamic bond was oversubscribed 2.3 times amid "strong demand" from global investors and is listed on the Nasdaq Dubai and London Stock Exchange, DP World said in a statement on Thursday.
Proceeds from the sukuk will be earmarked for eligible green projects that include electrification, renewable energy, clean transportation and energy efficiency, the company said.
"We aspire to lead global trade into a more resilient, efficient, and sustainable future for our customers and their customers," Sultan bin Sulayem, group chairman and chief executive of DP World, said.
The green sukuk issuance will help the company further align its sustainability strategy, and decarbonisation efforts, with the group’s financing strategy, according to Yuvraj Narayan, group deputy chief executive and chief financial officer.
In May, DP World said it cut direct carbon emissions from its global operations by 5 per cent last year in pursuit of its target to become carbon neutral by 2040.
DP World, which operates ports around the world from Buenos Aires to Hong Kong, pledged in 2021 to become a carbon neutral enterprise by 2040 and achieve net zero carbon by 2050. It has also set an intermediate target of a 28 per cent reduction in its carbon footprint by 2030.
At the Cop27 summit in Egypt last November, the company pledged to invest up to $500 million to cut carbon emissions from its operations over the next five years.
On Thursday, DP World said its green sukuk was priced at a spread of 119.8 basis points above US treasuries.
"The price we achieved for this green sukuk is phenomenal and represents the confidence investors have in DP World as a company and our commitment to sustainability," Mr bin Sulayem said.
DP World said its 10-year green sukuk had a yield of 5.5 per cent.
The banks involved in the deal included Citigroup, Deutsche Bank, Dubai Islamic Bank, Emirates NBD, First Abu Dhabi Bank, HSBC, JP Morgan Securities and Standard Chartered.
In its sustainable finance framework, DP World said its decarbonisation strategy cuts across five pillars: equipment electrification, process efficiency and digitalisation, renewable energy supply, low-carbon fuel supply and carbon compensation.
In 2022, the international shipping sector accounted for about 2 per cent of global energy-related carbon dioxide emissions, according to the International Energy Agency.
Steering the global maritime shipping sector onto a trajectory consistent with net zero emissions by 2050 requires an almost 15 per cent reduction in emissions from 2022 to 2030, the energy agency said.