Dubai: Etihad airways said it raised $1.2 billion in the first sustainability-linked loan (SLL) tied to environmental, social and governance (ESG) targets in global aviation.
“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,” said Adam Boukadida, Chief Financial Officer at Etihad Aviation Group.
“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,” said Boukadida.
The deal, the largest sustainable financing in the airline’s history, follows two aviation financing deals – a sustainability-linked transition sukuk in 2020 and a loan tied to the UN Sustainable Development Goals in 2019.
“Our goals will have a real-world impact, and to underscore our accountability, we have committed to penalties and incentives of up to $5.5 million linked to our progress against key performance indicators,” said Boukadida. “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 picked HSBC and First Abu Dhabi Bank (FAB) as the strategic partners and financiers for the deal.
“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,” said Abdulfattah Sharaf, CEO, HSBC UAE & Head of International Markets.