Saudi British Bank (SABB) has become the first Saudi institution to make a green deposit as the clamour for sustainable finance increases in the Gulf region.
The funds, deposited with HSBC in the UAE, will be used solely to finance green initiatives, a statement said.
It is the first green deposit issued in UAE dirham and one of the first green deposits made by a financial institution in the Middle East.
The deal comes just a few months after HSBC launched green deposits in the UAE. The bank said interest in the sustainable financing option has been immediate, with this being the third green deposit issued so far.
Antoine Maurel, head of markets & securities services, CEEMEA, HSBC, said: “We are committed to being the leading bank for ESG solutions in the Middle East and continue to support our clients across the region in establishing their ESG and sustainable frameworks.”
Philippe Robert, regional head of FI sales and international markets, global liquidity and cash management, HSBC Middle East, North Africa and Turkey, added: “Clients across the region are demanding greater access to green finance and innovative products to meet their growing ambitions to manage capital in a more sustainable way.
“Green deposits are already proving very popular as businesses know that their funds are going towards supporting green projects.”
HSBC is the first bank in the UAE to offer green deposits, which allows corporate and institutional companies to invest surplus cash funds in sustainable projects, knowing that it will be used to finance green initiatives.
Mohammed Al-Shaikh, deputy managing director – treasury at SABB, said: “It gives us great pleasure to announce the kingdom’s first green deposit which is a true testament of the pivotal role ESG plays in our merged bank’s newly announced strategy. Our partnership with HSBC puts us in a unique position to expand our offering continuously and provide best in class solutions for our customers and the kingdom as a whole.”
Funds deposited will be used by HSBC to provide financing for green projects and initiatives such as renewable energy, energy efficiency, green buildings and biodiversity conservation.
In the UAE, HSBC offers a suite of green products for both the corporate and retail segments, and earlier this year it issued the UAE’s first green mortgages.
The bank has also formed a dedicated Sustainable and Transition Finance Team for the Middle East, to help economies across the region achieve their climate targets.
In 2020, HSBC saw a six-fold increase in its sustainable and transition finance activity in MENAT over 2019, with the bank bringing a number of innovative deals to market.
HSBC played a key role in the issuance of the world’s first ‘transition’ sukuk, which was issued by Etihad Airways. The $600 million raised by the airline will be used for energy-efficient aircraft and research and development into sustainable aviation fuel.
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