Majid Al Futtaim (MAF) on Wednesday marked the listing of the world’s first benchmark corporate Green Sukuk, and the first Green Sukuk issued by a corporate in the region.
Valued at $600 million and with a tenor of 10 years, the Green Sukuk is testament to Majid Al Futtaim’s long term commitment to support the transition to a low carbon economy. The investment will be used to finance and refinance Majid Al Futtaim’s existing and future green projects, including green buildings, renewable energy, sustainable water management, and energy efficiency.
To mark the occasion, Alain Bejjani, CEO at Majid Al Futtaim – Holding, rang the market-opening bell at Nasdaq Dubai, in the presence of Essa Kazim, governor of Dubai International Financial Centre (DIFC) and chairman of Dubai Islamic Economy Development Centre (DIEDC), and Hamed Ali, chief executive of Nasdaq Dubai.
“This issuance will enable Majid Al Futtaim to deliver more sustainable experiences for our customers and to address the implications of climate change. As we progress on our sustainability journey, we are extremely proud to list the world’s first benchmark corporate Green Sukuk and look forward to identifying and pioneering innovative ways to meet our ambition to be Net Positive by 2040. The widespread interest from global investors in the bond indicates their confidence in our ESG rating, BBB credit rating, and prudent financial and risk management approach. Investors’ faith in our vision empowers us to continue on our path to become one of the most environmentally sustainable companies within our industries,” said Alain Bejjani.
“Majid Al Futtaim’s Green Sukuk listing reflects the forward-looking and progressive outlook of Dubai’s leading businesses and the vitality of its capital markets infrastructure. The listing further supports Dubai’s growth as the global capital of the Islamic economy, under the initiative launched by His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice-President and Prime Minster of the UAE and Ruler of Dubai,” said Essa Kazim.
With the Green Sukuk listing, the value of all debt instruments listed on Nasdaq Dubai by Majid Al Futtaim has reached $2.4 billion. The company’s other listings comprise one Sukuk of $500 million that listed in 2015, and two conventional bonds of $500 million each that listed in 2013 and 2014 respectively, and a $300 million tap on the 2014 bond that listed in 2016.
In preparation for issuance of the Green Sukuk, Majid Al Futtaim recently established a Green Finance Framework and a Green Finance Steering Committee, which will oversee the selection of new and existing projects for the green portfolio. Majid Al Futtaim has also received a “low risk” environmental, social and governance (ESG) rating by Sustainalytics, an independent ESG auditor, certifying the company is at ‘low risk’ of experiencing financial impact from ESG factors, due to its low exposure and effective management of ESG issues.
The total value of all Sukuk listed on Dubai’s exchanges has now reached $61.49 billion, the largest amount of any listing centre in the world.
Edib Smolo is the Founder and CEO of SARAYCON – Saray Consultancy for Socially Responsible & Ethical Finance. Currently, he is an assistant professor of finance at International University of Sarajevo. He has extensive experience in fields of Islamic banking and finance.
He holds a PhD in Islamic finance. He is an expert on Islamic finance and banking. In addition to a large number of scientific papers, he is also the author of the book “Introduction to Islamic Economics and Finance: Theory and Practice” (in Bosnian language) published in 2013.