Etihad raises first ESG loan in global aviation

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Etihad has raised $1.2 billion in the world’s first sustainability-linked aviation loan.
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  • Etihad selected HSBC and First Abu Dhabi Bank 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

Etihad Airways has raised $1.2 billion in the first sustainability-linked loan tied to environmental, social and governance targets in global aviation, it has said in a statement.

The transaction is the largest sustainable financing in the airline’s history, it said.

The airline added that this follows two 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.

Overall, the loan terms are tied to targets to reduce CO2 emissions, increase corporate governance, and promote female participation.

As for the details, Etihad will on the environmental front be evaluated on reducing the carbon emissions intensity of the passenger fleet, as measured in terms of CO2 emissions per revenue ton kilometers.

As part of its Greenliner Program, Etihad has already committed to an ambitious target of net zero carbon emissions by 2050 and has set milestone goals for 2035 and 2025.

On the social front, the airline will be evaluated on both female participation and ongoing training and development.

Etihad has established the Global Business Service Solution center in Al Ain to contribute towards the socioeconomic development of the community, and increase employment and upskilling of Emirati women in the aviation sector.

As for governance, it is expected to be linked to the Integrity Score, a comprehensive measure used to assess the overall internal culture of integrity at the airline.

Etihad Airways selected HSBC and First Abu Dhabi Bank 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 for the deal for Etihad, the national carrier of the UAE.

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