DIB Launches First Sustainability-Linked Sukuk Worth 1 Billion Dollars
Image used for illustrative purpose. Photo: WAM
Dubai Islamic Bank (DIB) has announced a big achievement. The bank has issued its first Sustainability-Linked Sukuk worth 1 billion US dollars. This Sukuk will last for five years and gives a profit rate of 4.572% each year.
This is an important moment for DIB because it is the first time the bank has used a Sustainability-Linked format. It also continues the bank’s earlier work, as DIB was the first Islamic bank to create a Sustainability-Linked Finance Framework. This new Sukuk supports the UAE’s plan to reach Net Zero by 2050.
The new Sukuk is different from normal Sukuk. Instead of using the money only for specific projects, it links the impact to real results. Investors’ money will go to clients who promise to follow clear sustainability goals. These goals must be measurable and checked by independent experts.
DIB says this shows its strong commitment to responsible finance and environmental, social, and governance (ESG) principles. The new framework was reviewed by Institutional Shareholder Services (ISS), which confirmed that it meets global standards for Sustainability-Linked Sukuk.
The Sukuk received huge interest from investors around the world. The orderbook reached 2 billion US dollars, which is double the amount DIB planned. More than 80 major investors from Europe, Asia, and the Middle East took part.
Most of the Sukuk, about 67%, was bought by investors from the MENA region. Asia bought 20%, which is the highest share DIB has ever received from Asia in a public Sukuk. The remaining 13% went to the UK, Europe, and other regions. Banks and private banks bought 77% of the Sukuk, while fund managers bought 17%. The rest went to insurance companies, pension funds, and sovereign wealth funds.
DIB began marketing the Sukuk on 10 November through online meetings, where the bank shared its financial results. This helped build strong interest. On 12 November, DIB opened the orderbook at 120 basis points above US Treasuries. Because of high demand, the final pricing dropped to 90 basis points, giving a profit rate of 4.572%.
Dr. Adnan Chilwan, CEO of DIB, said that this Sukuk is an important step in the bank’s journey toward sustainability. He said it shows the strong trust that global investors have in DIB and in the UAE’s strong economy. He added that Islamic finance should not only follow rules but also create positive impact for society and the environment.
He said the new Sukuk takes DIB from “good intentions” to “real performance.” The high interest from global investors shows that the world values institutions with strong values and a clear sustainability vision.
This Sukuk is part of DIB’s 12.5 billion US dollar Sukuk Programme, which is listed on Euronext Dublin and Nasdaq Dubai. Standard Chartered Bank acted as the Sustainability Advisor.
The Joint Lead Managers and Bookrunners for the deal were Standard Chartered Bank, Arqaam Capital, Bank ABC, DIB, Emirates NBD Capital, First Abu Dhabi Bank, HSBC, ICBC, KFH Capital, KIB Invest, Maybank, QInvest, and Sharjah Islamic Bank.
