National Central Cooling Company PJSC , a leading district cooling provider in the United Arab Emirates, has successfully issued a $700 million five-year green sukuk. This strategic move underscores the company's commitment to sustainable financing and positions it prominently within the rapidly expanding green finance sector.

The sukuk, structured under Regulation S, carries a fixed profit rate of 5.29% per annum, with payments scheduled semi-annually. Initially marketed at a spread of 155 basis points over U.S. Treasuries, robust investor demand enabled Tabreed to tighten the pricing to 115 basis points over Treasuries, reflecting strong market confidence in the company's financial health and strategic direction.

Investor interest in the sukuk was substantial, with order books exceeding $2.25 billion, excluding joint lead manager interest, indicating an oversubscription of over three times the issuance size. This high demand highlights the growing appetite for green investment opportunities in the region and globally.

The issuance forms part of Tabreed's $1.5 billion Trust Certificate Issuance Programme and is listed on the London Stock Exchange, enhancing the company's visibility and appeal to a broader investor base. The proceeds from this green sukuk are earmarked for financing environmentally sustainable projects, aligning with Tabreed's commitment to environmental stewardship and the global transition towards a low-carbon economy.

This successful issuance not only reinforces Tabreed's leadership in the district cooling sector but also underscores the company's dedication to integrating sustainability into its financial and operational strategies. By leveraging green financing instruments, Tabreed aims to support the development of energy-efficient infrastructure, contributing to the UAE's sustainability goals and the broader global environmental agenda.

The green sukuk aligns with Tabreed's Green Finance Framework, which outlines the company's approach to funding projects with clear environmental benefits. This framework ensures transparency and accountability in the allocation of proceeds, reinforcing investor confidence in the company's sustainability initiatives.

Tabreed's strategic focus on sustainable growth is further evidenced by its recent operational achievements. The company has expanded its cooling capacity and extended its footprint across the region, serving critical sectors such as healthcare, education, and residential communities. These developments not only bolster Tabreed's market position but also contribute to the energy efficiency and environmental sustainability of urban infrastructure in the Middle East.

The successful pricing and strong demand for Tabreed's green sukuk reflect a broader trend in the capital markets, where investors are increasingly seeking opportunities that combine financial returns with positive environmental impact. This trend is particularly pronounced in the Gulf Cooperation Council region, where governments and corporations are actively promoting green finance as part of their economic diversification and sustainability strategies.

In this context, Tabreed's green sukuk issuance sets a precedent for other regional companies considering sustainable financing options. It demonstrates the viability and attractiveness of green sukuk as a tool for raising capital while supporting environmental objectives, thereby contributing to the development of a more sustainable financial ecosystem in the region.

As the global focus on climate change intensifies, the role of green finance instruments like sukuk is expected to become increasingly significant. They offer a means for companies to align their funding strategies with environmental goals, meet investor demand for sustainable assets, and contribute to the achievement of national and international climate commitments.