Etihad Airways raises US$1.2 billion in sustainability-linked ESG loan

ABU DHABI: Etihad Airways has raised US$1.2 billion in the first sustainability-linked loan (SLL) tied to environmental, social and governance (ESG) targets in global aviation.

The transaction is the largest sustainable financing in the airline’s history and follows two innovative aviation financing deals – a first-of-a-kind sustainability-linked transition sukuk in 2020 and a loan tied to the UN Sustainable Development Goals in 2019.

Adam Boukadida, Chief Financial Officer at Etihad Aviation Group, said, “Etihad Airways has spearheaded sustainable financing in aviation, and we are proud to continue our innovative track record by being the first airline to secure a sustainability-linked ESG loan. Financing our operations in a way that supports both our planet and the people in our local communities is the natural next step of our financing strategy.

“Our goals will have a real-world impact, and to underscore our accountability, we have committed to penalties and incentives of up to US$5.5 million linked to our progress against key performance indicators. Through our Greenliner programme, we are pursuing multiple sustainability-related initiatives at Etihad Airways to improve the environmental footprint of aviation, and green financing is a key part of our strategy.”

Etihad Airways selected HSBC and First Abu Dhabi Bank (FAB) as the strategic partners and financiers for this transaction. The two acted as Joint ESG Structuring Banks, Joint ESG Coordinators, Joint Bookrunner and Mandated Lead Arranger. FAB also acted as Facility Agent.

Commenting on his bank’s participation, Abdulfattah Sharaf, CEO, HSBC UAE & Head of International Markets, said, “HSBC is committed to helping lead the transition to a net zero carbon economy and we’re mobilising finance and accelerating innovation to make this happen, working in partnership with our customers to realise the opportunity to build a more sustainable, resilient, and prosperous future. This is our second sustainability-linked transaction with Etihad, sending a strong signal that two global companies with leading UAE businesses – such as HSBC and Etihad – are committed to working in partnership to find innovative ways to finance industry while also protecting the planet.”

From his side, Martin Tricaud, Group Head of Investment Banking, FAB, said, “As a strategic partner and financier to Etihad in this transaction, FAB has demonstrated its sustainable financing expertise and contributed to the transition towards sustainability across the aviation sector. As the UAE’s largest bank, we play an active role in supporting the economy, environment and communities that we operate in. We recognise the importance of the benefits and opportunities that can be brought about through sustainable finance. FAB is committed to empowering the UAE’s priority sectors to grow and become more sustainable through our impactful finance solutions.”