Aldar Properties becomes MENA’s first real estate company to secure sustainability-linked loan

Aldar Properties becomes MENA’s first real estate company to secure sustainability-linked loan

Aldar Properties has signed a Dhs300m facility with HSBC that links the interest margin payable under the facility to achievement of sustainability targets. It has therefore become the first real estate company in the MENA region to enter into a sustainability-linked financing arrangement. The five-year term sustainability-linked loan includes a mechanism to adjust Aldar's interest margin annually in line with achievement of targets on energy and water intensity, waste recycling and worker welfare. The loan will be used for general corporate purposes, including the roll-out of ESG initiatives across the group. As part of the agreement, Aldar has also committed to investing a fixed amount in one or more qualifying environmental, social and governance (ESG) projects if it does not reach agreed annual targets, according to state news agency . The transaction is structured in alignment with the Sustainability-Linked Loan Principles (SLLP) published by the Loan Market Association (LMA), Asia Pacific Loan Market Association (APLMA), and Loan Syndications & Trading Association (LSTA). Last year, Aldar launched a sustainability strategy that focused on improving the way it does business and ensuring that the company has a positive impact on the economy, environment, people and the communities in which it operates. Aldar's