First Abu Dhabi Bank has raised EUR 750 million from an oversubscribed three-year green bond, in a transaction the lender described as the largest euro-denominated green bond ever issued by a bank in the Middle East and North Africa. The notes were priced at a yield of 3.5302%, according to the bank, reflecting strong demand from a diverse international investor base.
The issuance was executed under FAB's Sustainable Finance Framework, with proceeds earmarked for eligible projects across renewable energy, green buildings, clean transportation and sustainable water management. FAB, the United Arab Emirates' largest lender by assets, said the strong reception reflected international investor appetite for high-grade euro-denominated sustainable paper from Gulf issuers and validated the bank's positioning in the region's transition finance market.
A REGIONAL FIRST IN EURO GREEN FINANCE
The transaction underscores the growing depth of the sustainable debt market for MENA banks, which have historically leaned on US dollar issuance to tap deep pools of global capital. By pricing a euro-denominated deal of this scale, FAB has signalled that European investors are willing to lend to Gulf sustainability leaders at competitive levels, extending the diversification of the region's funding base beyond its traditional reliance on the dollar market.
The three-year tenor is well suited to a bank of FAB's size, matching the profile of assets typically financed under green bond frameworks while offering investors a relatively short duration in a still-uncertain rate environment. The 3.5302% yield reflects prevailing euro-swap benchmarks and the credit spread demanded for a senior unsecured obligation from a large investment-grade Gulf bank.
Winning the label of largest euro-denominated green bond by a bank in MENA is a notable marker for FAB, coming as European asset owners intensify their focus on climate-aligned mandates. Euro sustainable bond markets have grown substantially, and Gulf lenders that can access them are able to broaden and lower the cost of their sustainable funding.
PROCEEDS TIED TO ELIGIBLE PROJECTS
Under the Sustainable Finance Framework governing the transaction, FAB has committed to allocate net proceeds to categories including renewable energy, green buildings, clean transportation and sustainable water management. The framework is intended to align issuance with internationally recognised standards for green bonds, providing investors with a defined universe of eligible use-of-proceeds projects and clear reporting obligations.
Sustainable water management has become an increasingly prominent theme for Gulf issuers, reflecting the region's exposure to water stress and its heavy investment in desalination and network efficiency. Renewable energy remains the anchor category, with the UAE targeting a significant increase in clean-power capacity as part of its national energy strategy, alongside investment in green buildings and lower-carbon transport.
For FAB, the transaction extends a track record of sustainable finance issuance and reinforces the bank's position as one of the region's most active issuers of ESG-labelled debt. The bank said the deal would support its role in financing the transition to a lower-carbon economy across its home market and beyond, providing balance-sheet capacity for the growing pipeline of green projects being developed in the UAE and other Gulf economies. The oversubscription of the order book, referenced in the bank's announcement, indicates that appetite for the transaction exceeded the eventual EUR 750 million size, which typically results in tighter final pricing than the initial guidance.