DP World has launched a groundbreaking $100 million Blue Bond aimed at financing sustainable initiatives across marine transportation, port infrastructure, marine pollution, and nature and water-positive projects.
This bond issuance will play a crucial role in addressing the considerable funding shortfall for UN Sustainable Development Goal 14 (Life Below Water) and Goal 6 (Clean Water and Sanitation), while also enhancing transparency to cater to the increasing interest from investors in blue assets.
This, according to a statement, marks the first Blue Bond issued by a company in the Middle East and North Africa, underscoring DP World’s intention to lead the logistics industry and the region towards a more resilient future. Additionally, it is the first corporate Blue Bond from the wider Central & Eastern Europe, Middle East, and North Africa region.
DP World’s 5-year Blue Bond has been priced at a spread of 99.6 basis points above US Treasuries, featuring a coupon rate of 5.25 percent. This represents DP World’s narrowest spread ever in the bond or sukuk market, highlighting the issuance’s allure.
The primary investor in this bond is investment management firm T. Rowe Price Associates, Inc.
The Blue Bond aligns seamlessly with DP World’s newly launched Ocean Strategy, as well as its longstanding Decarbonization and Water Strategies. The Ocean Strategy encompasses four foundational pillars that connect global trade with environmental stewardship, bolstering the company’s leadership in promoting a Sustainable Blue Economy and breaking down barriers to comprehensive climate and ocean action. This strategy aims to further the Paris Climate Agreement and the Kunming-Montreal Global Biodiversity Framework Goals.
Read more: DP World begins maritime works on $1.2 billion Senegal port
Commitment to ocean preservation
Sultan Ahmed bin Sulayem, group chairman and chief executive of DP World, stated: “As a responsible leader in global trade, we are committed to preserving the ocean’s ability to provide for future generations. It is our ambition to lead our industry towards a sustainable blue economy as we work with our partners to remove barriers to comprehensive climate and ocean action. This Blue Bond will lay the foundation for the years to come.”
He added, “We are increasingly working in regions where the ocean is being polluted, coastal biodiversity is being lost, and critical resources like water are becoming scarcer, posing significant threats to both nature and people. This issuance represents DP World’s second foray into the sustainable financing capital markets highlighting our commitment to sustainability and demonstrates our approach towards sustainable business practices.”
Rob Sharps, chairman, CEO, and president of T. Rowe Price Associates, Inc., remarked: “We are proud to partner with DP World on its issuance of the first corporate Blue Bond in the Middle East. This innovative transaction will mobilise capital towards UN SDG 14, Life Below Water, while providing an opportunity for attractive investment returns. We recognize UN SDG 14 as the most underfunded of all the sustainable development goals. We hope this transaction can be a model for other issuers and investors to support the blue economy.”
Advisory support
Philip Brown, managing director and global head of Sustainable Debt Capital Markets at Citigroup, which provided advisory services for the bond, said:
“Citi is proud to have supported DP World in arranging this important inaugural Blue Bond issuance under the updated and pioneering Sustainable Finance Framework.”
Eligible projectsÂ
The eligible projects encompassed by the Blue Bond portfolio include:
- Sustainable marine transportation: Supporting research, development, and procurement of alternative fuels and technologies aimed at reducing carbon emissions and other sources of marine pollution within the maritime sector.
- Sustainable ports development: Financing infrastructure upgrades to lessen environmental impacts, as well as noise and air pollution.
- Marine ecosystem conservation and restoration: Expanding nature-based solutions projects to conserve and restore marine ecosystems, while promoting innovations to enhance biodiversity.
- Marine pollution: Initiatives focused on addressing waste and pollution in coastal and marine environments, improving water quality, and ensuring equitable access to water.
Sustainable Finance Framework
This bond issuance follows the release of DP World’s enhanced Sustainable Finance Framework, which aligns with various international standards. Additionally, the Framework considers the Guidelines for Blue Finance from the International Finance Corporation and the “Bonds to Finance the Sustainable Blue Economy – A Practitioner’s Guide.”
Earlier this year, DP World released its inaugural Green Sukuk Impact and Allocation Report. Of the $1.5 billion raised in 2023, $1.17 billion has already been allocated to eligible green projects. Moreover, projects financed through the Sukuk have helped avoid over 177 million kg of CO2 emissions, saved 466,057 MJ of energy, and generated 866,686 kWh of renewable energy.
