DP World issues MENA region’s first $100m blue bond

DP World has launched a $100m blue bond to finance projects that support marine transportation, port infrastructure, marine pollution reduction, and nature- and water-positive initiatives.

This landmark issuance marks the first blue bond from a company in the Middle East and North Africa (MENA) region.

The blue bond, priced at a 5.25 per cent coupon rate for a five-year term, will directly contribute to advancing two critical United Nations Sustainable Development Goals (SDGs): SDG 14 (Life Below Water) and SDG 6 (Clean Water and Sanitation).

With rising marine pollution and water scarcity concerns worldwide, DP World aims to close the funding gap for these underfunded SDGs while enhancing transparency in the rapidly growing market for “blue assets”.

T. Rowe Price Associates, a global investment management firm, is the key investor in the issuance, highlighting the growing investor interest in sustainable financing.

The bond fully aligns with DP World’s Ocean Strategy, which supports the company’s long-standing decarbonisation and water strategies.

The Ocean Strategy aims to link global trade with environmental stewardship, promote a sustainable blue economy, and advance climate and biodiversity goals set out in the Paris Climate Agreement and the Kunming-Montreal Global Biodiversity Framework.

Sultan Ahmed bin Sulayem, group chairman and DP World‘s chief executive, emphasised the bond’s significance in the company’s broader sustainability strategy. “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.”

Sulayem also highlighted the urgent environmental challenges facing the regions where DP World operates. “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 and underscores our commitment to sustainability.”

Rob Sharps, chairman and CEO of T. Rowe Price Group, praised the Blue Bond as an innovative step towards addressing the funding shortfall in ocean and water conservation. “This innovative transaction will mobilise capital towards UN SDG 14, Life Below Water while providing an opportunity for attractive investment returns. We recognise SDG 14 as the most underfunded of all the sustainable development goals and hope this transaction can serve as a model for other issuers and investors to support the blue economy.”

Blue bond proceeds to go to conservation projects

The bond proceeds will be directed towards a range of eligible projects aimed at preserving marine ecosystems and promoting sustainable practices across DP World’s global operations. These include:

Sustainable marine transportation: 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: Infrastructure upgrades to minimise environmental impacts such as noise and air pollution in port operations.

Marine ecosystem conservation and restoration: Expanding nature-based solutions to conserve and restore marine ecosystems and enhance biodiversity.

Marine pollution: Initiatives to tackle waste and pollution in coastal and marine environments, improve water quality, and ensure equitable access to water.

The issuance follows the publication of DP World’s enhanced Sustainable Finance Framework, which aligns with global standards, including the International Finance Corporation’s Guidelines for Blue Finance and the “Bonds to Finance the Sustainable Blue Economy – A Practitioner’s Guide”.

DP World’s blue bond follows the success of its green sukuk issuance earlier this year, through which the company raised $1.5bn in 2023.

Of the total raised, $1.17bn has already been allocated to eligible green projects, which have contributed to avoiding over 177 million kg of CO2 emissions, saving 466,057 MJ of energy, and generating 866,686 kWh of renewable energy.

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