Waleed Al-Mogbel, CEO of Al-Rajhi Bank, announced that the bank has successfully concluded a three-year dual tranche sustainability commodity murabaha facility with the total amount exceeding $1 billion, making Al-Rajhi the first Islamic financial institution in the world to conclude such Shariah-compliant sustainability financing.
This transaction is considered the largest Shariah-compliant syndication in the Middle East that complies with environmental, social and governance practices. The deal was well received in the international and regional markets as Al-Rajhi succeeded in increasing the financing from the initial offered amount, and a diversified group of 13 global investors from North America, Europe, Asia and the Middle East participated in the landmark transaction. The proceeds aimed to increase the bank’s liquidity levels, which will have a positive impact on the bank’s overall business activities.
The syndication was led by HSBC and SMBC International Bank as mandated lead arrangers and bookrunners. The participation of global institutions reflects the trust in Al-Rajhi Bank’s overall business activities, market share and market positioning. It also demonstrates the bank’s commitment to environmental and social sustainability practices, as all proceeds from this financing will be allocated to qualified sustainable projects that are Shariah-compliant and have a positive impact, as specified in the bank’s framework of sustainable financing.
This is considered the first ESG syndication loan in accordance with the bank’s sustainable financing framework, which was established to facilitate financing in accordance with ESG principles. Standard Chartered Bank assisted Al-Rajhi Bank in developing the sustainable finance framework. S&P Global assessed the framework as an independent entity and confirmed that it complies with the Green Loan Principles, Social Loan Principles, Environmentally Friendly Bond Principles, Social Bond Principles and Sustainability Bond Guidelines of the ICMA.