FAB Boosts UAE’s Net-Zero Ambitions with Targeted Green Financing
First Abu Dhabi Bank (FAB), the UAE’s largest banking institution, has announced its plans to provide green financing to high carbon-emitting sectors in order to support the country’s net-zero goals by 2050. The bank initially aims to finance sustainability-linked projects in three sectors – aviation, oil and gas, and power generation – which are the highest carbon emitters.
In an interview, Shargiil Bashir, FAB’s Group Chief Sustainability Officer, discussed the bank’s strategy to contribute significantly to the Middle East’s net-zero objectives. He stated that it is FAB’s responsibility to support clients in reducing their greenhouse gas (GHG) emissions through the operations they finance, referred to as ‘financed emissions’. FAB has already achieved a 31% reduction in its GHG intensity per full-time employee from 2019 to 2022.
Bashir explained that the bank’s focus on the three high-emitting sectors is part of the first phase of its plan, and in the next 12 months, they will analyze other sectors to understand their financed emissions. Each sector will have its own unique journey toward net-zero, and FAB aims to support its customers in this pursuit.
FAB has set a target to facilitate $75 billion in sustainable projects by 2030, and in 2022, it facilitated $9.1 billion toward this goal. The bank is eager to support sustainable projects for all industries on their journey to net-zero.
A recent example of FAB’s financing approach is the sustainability-linked loan provided to ADNOC Distribution. This loan will help ADNOC Distribution reduce its carbon intensity by 25% by 2030 through the installation of solar panels, use of biofuels, and expansion of their electric vehicle charging station network.
FAB evaluates the success of its sustainable project financing through the impact of the projects it has financed. The bank measures each project against its Sustainable Finance Framework, which aligns with international guidelines. Furthermore, financing green or sustainable projects is priced similarly to other projects, depending on factors such as risk, sector, and maturity.
With this financing initiative, FAB aims to support the UAE’s ambition of achieving net-zero emissions by 2050 and contribute to the country’s sustainable development journey.
