National Bank of Abu Dhabi plans to start an investor roadshow next week to issue a benchmark-sized green bond, the proceeds of which would be used to invest in renewable energy, sources familiar with the matter said on Thursday. So-called “green bonds” have become an increasingly popular source of borrowing for emerging market banks, especially those from India and China, but the sources said NBAD’s five-year issue would be the Middle East’s first green bond.
Benchmark-sized generally means at least $500 million. An NBAD spokesman declined to comment.NBAD has mandated Bank of America Merrill Lynch, Bank of Tokyo-Mitsubishi, Credit Agricole, Citi, HSBC and its own debt capital markets team to arrange the issue, the sources said.The Abu Dhabi bank announced plans in January to lend, invest and facilitate a total of $10 billion of financing within the next 10 years for environmentally sustainable projects. It said at the time that $48 trillion would be required in the next 20 years to meet global energy demand, with a significant amount of that likely to come from renewable sources.
The bank is in the midst of a merger with rival Abu Dhabi-based lender First Gulf Bank. The merger of the two banks, recommended by the boards of the two lenders last month, is expected to be completed in the first quarter of 2017.Several other banks from emerging markets have issued green bonds in recent months. Bank of China last month sold a $3 billion multi-currency green bond, while in May India’s Axis Bank sold a $500 million, five-year green bond.