Abu Dhabi – Mubasher: Aldar Properties has inked an agreement with HSBC to secure an innovative five-year term sustainability-linked loan worth AED 300 million.

The property developer becomes the first real estate company in the Middle East and North Africa (MENA) to enter into this type of financing, according to a press release on Sunday.

The loan annually links Aldar's interest margin to the achievement of sustainability targets on energy and water intensity, waste recycling, and worker welfare.

As part of the agreement, Aldar will also invest a fixed amount in qualifying environmental, social, and governance (ESG) projects if the company does not reach agreed annual targets.

The loan will be used for general corporate purposes, including the roll-out of ESG initiatives across the group.

The Group Chief Financial and Sustainability Officer at Aldar, Greg Fewer, said: "Our financial stakeholders are increasingly factoring sustainability assessments into their portfolio strategies. At Aldar, we believe this shift in capital allocation is a positive force that creates a powerful incentive for companies to up their sustainability game to benefit from these capital flows."

The Head of Global Banking of HSBC UAE, Mohammed Al Marzouqi, commented: "The real estate sector plays an important role in helping the world tackle climate change, considering up to 70% of emissions in a large city are related to its buildings."