Etihad Rail Unveils Sustainable Finance Plan for Rail Expansion

Etihad Rail, the developer and operator of the UAE National Rail Network, has unveiled its Sustainable Finance Framework. This comprehensive guide is designed to link the company's future financing to its Environmental, Social, and Governance (ESG) Strategy, specifically focusing on Clean Transportation, Green Buildings, and Pollution Prevention and Control.

Collaboration with Industry Experts

The development of the framework involved collaboration with various industry experts. First Abu Dhabi Bank and Standard Chartered Bank served as co-ESG advisors, providing their expertise and insights to ensure the framework's robustness. The framework's alignment with the Green Loan and Bond Principles was a key focus, further validated by a Second Party Opinion (SPO) from Det Norske Veritas (DNV).

Commenting on the launch, Ali Tabbal, Chief Financial Officer at Etihad Rail said: “The introduction of our Sustainable Finance Framework is a testament to Etihad Rail’s commitment to integrate and uphold sustainable practices in all our operations. Through responsible financial practices, we are further underscoring this dedication by driving positive environmental and social impact in the region across the transportation, logistics, and infrastructure sectors. This framework is a pivotal element of our broader ESG strategy, directly aligning with the United Nations’ Sustainable Development Goals. It provides a clear roadmap for integrating ESG considerations into investment decisions, empowering companies to generate long-term sustainable value. By doing so, we are not only fostering a transition to a low-carbon, resilient economy but also supporting the UAE’s Net Zero 2050 Strategy and contributing to the nation’s vision for a sustainable future.”

Structured Approach to Sustainable Financing

The framework outlines a structured approach for Etihad Rail to evaluate sustainable project financing. It details four main components:

1)    Green Loan and Bond Principles: Ensures alignment with international sustainability standards.

2)    Use of Proceeds: Defines clear criteria for the allocation of funds towards sustainable projects.

3)    Project Evaluation and Selection: Implements a rigorous process to identify impactful projects.

4)    Management of Proceeds and Reporting: Ensures transparency and accountability in fund utilization.

Integration with Etihad Rail's ESG Strategy

As an integral part of Etihad Rail’s ESG strategy, the framework includes mechanisms for environmental risk assessment and promotes transparency in the implementation of ESG initiatives. By integrating environmental considerations into investment decisions, Etihad Rail aims to mitigate environmental risks, capitalize on emerging sustainable markets, and demonstrate a strong commitment to environmental stewardship and social responsibility.

Fostering Collaboration and Knowledge-Sharing

Beyond guiding investment decisions, the framework fosters collaboration and knowledge-sharing among industry peers, regulators, and investors. This collaborative approach aims to accelerate the transition to a more sustainable financial system, reinforcing Etihad Rail's leadership in sustainability within the transportation and infrastructure sectors.