Dubai Islamic Bank (DIB), the world’s first Islamic bank and the largest in the UAE, has successfully issued its debut Sustainability-Linked Financing Sukuk. The $1billion issuance, which has a five-year tenor and is priced at a profit rate of 4.572% per annum, marks a significant evolution in Islamic sustainable finance.
The issuance moves beyond traditional use-of-proceeds models to a performance-linked structure, tying impact directly to measurable, independently verified sustainability targets, and supporting the UAE’s Net Zero 2050 Initiative.
Strong investor demand for performance-linked finance
The Sukuk saw exceptionally strong global interest, being more than 2 times oversubscribed with the orderbook peaking at $2billion. Over 80 institutional accounts from Europe, Asia, and the Middle East participated.
Key allocation highlights include:
- MENA Region: Received 67% of the Sukuk allocation.
- Asia: Accounted for 20%, marking the highest Asian allocation ever achieved in a public Sukuk issuance by DIB.
- Investor Type: 77% was allocated to banks and private banks, 17% to fund managers, and 6% to insurance companies, pension funds, and sovereign wealth funds.
The strong market reception allowed the final pricing to tighten to 90 basis points over US Treasuries, down from the Initial Price Thoughts of 120 basis points.
Advancing Islamic sustainable finance
This new Sustainability-Linked Financing Sukuk (SLFS) will channel investor capital into a diversified portfolio of general corporate purpose sustainability-linked financing. This financing will be extended to clients committed to achieving measurable, pre-agreed sustainability Key Performance Indicators (KPIs).
Dr. Adnan Chilwan, group chief executive officer of DIB, emphasised the bank’s leadership role: “As the world’s first Islamic bank, our responsibility has always extended beyond offering compliant structures. It is to lead with purpose and to demonstrate how Islamic finance can deliver measurable and responsible impact… This Sustainability-Linked Sukuk reflects that progression. It moves us from intention to performance”.
The Sukuk is a drawdown under the DIB $12.5billion Sukuk Programme. The underlying Sustainability-Linked Financing Framework was fully assessed by Institutional Shareholder Services (ISS), receiving a Second-Party Opinion confirming its alignment with international best practices.
