(TAN): Etihad Airways, the national airline of the United Arab Emirates, has launched the world’s first Transition Sukuk and the first Sustainability-Linked financing in global aviation, under a Transition Finance Framework. A sukuk is an Islamic financial certificate, similar to a bond in Western finance, that complies with Islamic religious law commonly known as Sharia.
This follows the first aviation financing linked to the United Nations Sustainable Development Goals raised in December 2019.
The USD 600 million transaction will support Etihad’s drive for sustainable aviation by linking the sukuk terms to Etihad’s carbon reduction targets: a commitment to Net Zero Carbon emissions by 2050; a 50% reduction in net emissions by 2035; and a 20% reduction in emissions intensity in the airline’s passenger fleet by 2025.
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Adam Boukadida, Chief Financial Officer, Etihad Aviation Group, said, “Sustainability and responsible climate action are the most significant challenges facing the aviation industry…by issuing a Sustainability-Linked Sukuk, Etihad is voluntarily adding to its existing commitments under CORSIA, and also committing to reduce carbon emissions intensity by over 20% from the 2017 baseline.”
