Key Impact Points:
- Etihad Rail has introduced a Sustainable Finance Framework to align future financing with its ESG goals, including clean transportation and pollution control.
- The framework sets the stage for potential green bond issuance, supporting the UAE’s ambition to reach net zero emissions by 2050.
- Developed with expertise from First Abu Dhabi Bank, Standard Chartered, and DNV, the framework fosters transparency, accountability, and long-term sustainable value.
Etihad Rail Sets Path for Green Bonds and Sustainable Projects
Etihad Rail, the developer and operator of the UAE National Rail Network, has unveiled a Sustainable Finance Framework designed to support its environmental, social, and governance (ESG) strategy. The framework, launched on Wednesday, outlines how the company will tie future financing to sustainability principles, with a focus on clean transportation, green buildings, and pollution prevention.
The initiative reflects the UAE’s commitment to addressing climate change, a goal underscored during last year’s U.N. climate talks and backed by the country’s $54 billion investment in energy and renewable sources through 2030. Etihad Rail’s new framework is a critical component of the nation’s efforts to reach net zero emissions by 2050, a challenge complicated by the region’s reliance on hydrocarbons.
A Roadmap for Sustainable Finance
The Sustainable Finance Framework was developed in collaboration with industry experts and ESG advisors, including First Abu Dhabi Bank and Standard Chartered Bank. To ensure its robustness, the framework received a Second Party Opinion (SPO) from Det Norske Veritas (DNV), a leading certification body.
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The framework is built around four key pillars:
- Green Loan and Bond Principles: Aligning with international sustainability standards.
- Use of Proceeds: Establishing criteria for allocating funds towards sustainable projects.
- Project Evaluation and Selection: Implementing a rigorous process to identify impactful projects.
- Management of Proceeds and Reporting: Ensuring transparency and accountability in the utilization of funds.
Ali Tabbal, Chief Financial Officer at Etihad Rail, emphasized the significance of this new direction: “The introduction of our Sustainable Finance Framework is a testament to Etihad Rail’s commitment to integrate and uphold sustainable practices in all our operations. This framework provides a clear roadmap for integrating ESG considerations into investment decisions, empowering companies to generate long-term sustainable value.”
Supporting the UAE’s Net Zero 2050 Strategy
The framework plays a crucial role in Etihad Rail’s broader ESG strategy, which aligns with the United Nations’ Sustainable Development Goals (SDGs). By embedding environmental considerations into investment decisions, Etihad Rail aims to mitigate environmental risks and leverage opportunities in emerging sustainable markets. The company’s efforts support the UAE’s vision for a sustainable future and its Net Zero 2050 Strategy.
Fostering Collaboration and Accountability
One of the framework’s key benefits is its emphasis on collaboration and knowledge-sharing among industry peers, regulators, and investors. This collaborative approach accelerates the transition to a sustainable financial system and reinforces Etihad Rail’s dedication to environmental stewardship and social responsibility.
By launching this Sustainable Finance Framework, Etihad Rail is not only setting the stage for green bond issuance but also ensuring that its growth supports a low-carbon, resilient economy for the UAE and the broader Gulf region.
