The national carrier of the United Arab Emirates, Etihad Airways, has become the first airline in the world to gain funding for a new project based on compatibility with the United Nations’ Sustainable Development Goals.
The airline is partnering with Abu Dhabi Global Market (ADGM) and the First Abu Dhabi Bank to borrow Dh404.2m to expand the Etihad Eco-Residence, which is a sustainable apartment complex intended for use by the airline’s cabin crew.
The loan securing process was dependent on a detailed international verification of the sustainability credentials of the airline, according to Etihad Aviation Group’s senior vice president of treasury, tax and finance Adam Boukadida.
Boukadida says that Etihad Airways is proud to be the first company in the world, as well as the first in the United Arab Emirates, to have been given commercial funding because of its commitment to the UN’s Sustainable Development Goals.
The assessment will allow Etihad Airways to fund long-term leases for the new complex, which is situated in the Masdar City innovation project in Abu Dhabi, and to be a foundation for the funding of more sustainable initiatives in the future for the airline.
Boukadida adds that it also highlights Abu Dhabi’s increasing specialisation as a centre for excellence in regard to the financing of sustainable projects at a time when demand for ethics-based development is growing all over the world.
A Sustainable Development Financing Framework has been established by Etihad in order to support this financing, specifying an array of different projects that the funding could provide for.
Financing for any of these projects has to be connected to at least one of the Sustainable Development Goals, if not more.
Seven main categories have been identified by the airline: Green Buildings, Biofuels, Waste Management and Recycling, Reduction of Carbon Footprint, Investment in Women, Humanitarian Efforts, and Wildlife Protection.
Etihad Aviation Group has also engaged the worldwide leader of ESG analytics, ratings and research, Sustainalytics, to look over the Etihad Sustainable Development Financing Framework (ESDFF).
This is to ensure that the ESDFF is aligned with the International Capital Markets Association’s Sustainability Bond Principles.
A second-party opinion has been issued by Sustainalytics to verify the sustainability credentials of the airline, which was a crucial condition for the capital to be raised.
The move to have the airline’s credentials independently reviewed demonstrated Etihad’s commitment to both sustainable development and the exercising of worldwide best practice, Boukadida claims.
The funding secured for the project via the partnership is a worldwide aviation first and one of the first in the region, Boukadida says, adding that it demonstrates not only the airline’s commitment to innovation but also Abu Dhabi’s capability to deliver it.
The ADGM is working closely with other authorities in the UAE to develop the Sustainable Finance Guidelines and further advance the nation’s economic diversification agenda.
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