Dubai-Based DP World Issues $100 Million Blue Bond for Sustainable Projects

Dubai-based terminal operator DP World has issued a staggering $100 million blue bond, becoming the first company in the Middle East to mark this ‘milestone’.

According to DP World, the blue bond will aim to fund environmentally friendly projects across marine transportation, port infrastructure, marine pollution, and nature and water-positive initiatives.

A blue bond is a ‘groundbreaking’ financial instrument in the maritime industry crafted to fund projects that benefit ocean preservation, eco-friendly marine resources, and blue economy initiatives. It adheres to the guidance provided by the International Capital Markets Association (ICMA) as well as other relevant organizations.

DP World’s Initiative

DP World is ‘the first’ to issue a blue bond in the wider MENA (Middle East and North Africa) region, extending to Central and Eastern Europe. The company’s five-year blue bond—backed by U.S.-based investment management firm T. Rowe Price Associates—was priced at a 5.25% coupon rate.

The blue bond issued by DP World has a very low extra interest rate (0.996%) compared to the safer US Treasury bonds. This is reportedly the lowest extra rate DP World has ever had to pay for its bonds or Sukuks, which are Islamic financial certificates structured to comply with Islamic law principles.

Through this issuance, DP World aims to aid in closing the funding gap for UN Sustainable Development Goals 14 (“Life Below Water”) and 6 (“Clean Water and Sanitation”).

DP World’s Commitment

Group Chairman and Chief Executive of DP World, Sultan Ahmed bin Sulayem, stated, “We are increasingly working in regions where the ocean is being polluted, coastal biodiversity is being lost, and critical resources like water are becoming scarcer, posing significant threats to both nature and people.”

He added, “This issuance represents DP World’s second foray into the sustainable financing capital markets, highlighting our commitment to sustainability and demonstrating our approach towards sustainable business practices.”

Blue Bond Portfolio

• Sustainable marine transportation: Supporting research, development, and procurement of alternative fuels and technologies to reduce carbon emissions and marine pollution.
• Eco-friendly ports development: Funding infrastructure upgrades to minimize environmental impacts.
• Marine ecosystem conservation and restoration: Expanding nature-based projects to conserve and restore marine ecosystems.
• Marine pollution: Initiatives to address waste and pollution in coastal and marine environments.

DP World’s Ocean Strategy

The blue bond aligns with DP World’s Ocean Strategy and Decarbonization and Water Strategies, supporting global environmental goals and the Paris Climate Agreement.

Earlier this year, DP World published its inaugural Green Sukuk Impact and Allocation Report, detailing the positive impact of green projects financed through Sukuk issuance.

Industry Milestone

Notably, the first-ever blue bond in the shipping industry was issued by Japanese shipping heavyweight Mitsui O.S.K. Lines (MOL) in January 2024, emphasizing the growing trend towards sustainable financing in the maritime sector.

MOL’s Blue Bond Framework ensures that all proceeds contribute to a sustainable blue economy, setting a precedent for environmentally conscious investments in the industry.