Dubai utility company Tabreed raises $700M through its first Green Sukuk to support expansion plans
Dubai’s National Central Cooling Company (Tabreed), mainly owned by Abu Dhabi’s Mubadala Investment Company, said on Wednesday that it has raised $700 million through its first five-year green sukuk.
Tabreed’s Green Sukuk
Tabreed has issued its first sukuk under a $1.5 billion trust certificate program. The new sukuk will be listed and traded on the London Stock Exchange’s International Securities Market.
Tabreed’s CEO, Khalid Al Marzooqi, said, “The UAE has big plans to reach net-zero emissions, and we are proud to help by reducing carbon emissions while supporting society with sustainable district cooling.”
The new green sukuk attracted strong interest from investors in the UAE, the region, and around the world. Demand was so high that the total orders were 4.3 times more than the available sukuk, and the final issue was oversubscribed by 2.6 times.
The sukuk was priced with a 5.3% profit rate, making it the best-priced investment-grade sukuk in the region this year. It also achieved the lowest-ever credit spread for a five-year sukuk issued by Tabreed.
Tabreed, a company listed in Dubai, said it is looking at different ways to refinance its debt. With this sukuk, Tabreed can now issue more green bonds and loans. The money raised will be used to fund or refinance green projects.
These projects include building, buying, and running district cooling systems, as well as improving energy and water efficiency and managing wastewater.
Citi and Standard Chartered Bank were the global coordinators for this sukuk. Citi, Emirates NBD, First Abu Dhabi Bank, HSBC, and Standard Chartered Bank also acted as lead managers and book runners.
Background
In 2006, Tabreed issued a $200 million sukuk, which was the first corporate sukuk from the Middle East to be listed on the London Stock Exchange.
Tabreed runs 92 district cooling plants in six countries. Last year, it became the first district energy company in the world to receive the verified carbon standard.
Big Number
Fitch expects that ESG sukuk (environment-friendly Islamic bonds) will go beyond $50 billion by 2025. This growth is due to strong investor interest, financial diversification, and government sustainability programs in some Muslim-majority countries.
Published: 6th March 2025
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