The Middle East’s path to a sustainable future
HSBC has helped Egypt become the first country in the Middle East to issue a sovereign green bond. Nour Safa, a Dubai-based Associate Director in HSBC’s Global Banking team, discusses the growing importance of sustainable finance in the region – and how the bank is helping clients to transition to a low-carbon economy.
Can sustainable finance make a positive difference for the environment?
We passionately believe so, yes. HSBC has set out a bold and ambitious plan to reduce our own carbon footprint in addition to integrating environmental, social and governance (ESG) considerations into our financing and lending decisions.
To support the world’s journey towards decarbonisation, we are providing financing for a wide range of projects that have a sustainable impact, such as renewable energy.
We are also expanding our portfolio of transition finance solutions so that we support the progressive decarbonisation of the most emissions-intensive sectors, while ensuring a fair and stable transition to a low-carbon global economy.
Our significant sustainable finance ambitions are a core focus for us and will allow us to measurably deliver on the big picture by supporting responsible and sustainable economic growth.
How is HSBC helping its clients in the Middle East to raise sustainable finance?
HSBC is at the forefront of the development of the sustainable finance market in the Middle East, and has been working with regulators and policymakers to develop the sustainability agenda.
We have arranged a number of landmark transactions, including the first ever green debt capital markets issuances in the region by a bank, a large corporate and a country.
Egypt’s recent sovereign green bond was a sign of the increasing interest in sustainable financing. The transaction raised USD750 million to be spent on projects in areas including clean transportation, renewable energy and sustainable water management. HSBC acted as a joint green structuring adviser, joint lead manager and bookrunner.
The expansion of green finance in the Middle East is particularly important given the vital role of transition finance as economies reduce their long-term reliance on carbon-intensive energy production.
We have developed a comprehensive range of sustainable finance products for clients including countries, corporates and banks. For example, we’re helping clients issue green and sustainable bonds; providing green, social and sustainable loans; and helping borrowers fund themselves through ESG-linked loans, which are designed to further incentivise their commitment to sustainability.
Other solutions that we offer include green supply chain financing and green trade products – so we’re playing a varied and important role.
HSBC sets out net zero ambition
Find out how we plan to help build a thriving low-carbon economy.
How is the sustainable finance sector evolving in the Middle East?
We have witnessed huge growth in this market over the past few years, albeit from a relatively low base. And we’re expecting sustainable finance to gain further traction over the next few years as more issuers look to source capital more sustainably.
This growth has been spurred on by regulators and policymakers who have adopted a range of positive, sustainable initiatives. For example, Egypt has set up a Regional Centre for Sustainable Finance to support the shift to a green economy. And in the UAE, Dubai launched an ESG index this year.
We’re expecting sustainable finance to gain further traction
Coupled with significant government investment in sustainable projects – from infrastructure to solar power – such initiatives are the foundation for ensuring sustainability is a driver of key investment and financing decisions. Indeed, they are already encouraging businesses to start developing more sustainable financing strategies.
Earlier this year, for example, one of the region’s major developers and shopping mall operators marketed over USD500 million-worth of 10-year US dollar-denominated sukuk (Islamic bonds), with all the proceeds being invested in green buildings.
And HSBC has advised an Abu Dhabi-based bank on the issuance of USD587 million in green bonds to enable it to finance projects in low-carbon buildings, transport, water, waste, land use and adaptation.
What do you enjoy most about your job?
I am fortunate to be part of this discussion on a day-to-day basis. I am personally passionate about the topic of sustainability – so being able to integrate this into my job is very rewarding.
I’m proud of how HSBC has taken a leading position in shaping the sustainable finance agenda – and of the recent announcement of our ambitious climate plans.
We’re making a difference and I’d like to see a positive impact sooner rather than later. There’s no time to waste.
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