Burgan Bank Successfully Establishes a Sustainable Financing Framework

Burgan Bank K.P.S.C. successfully established a sustainable financing framework in accordance with the applicable International Capital Market Association (ICMA) and Loan Market Association (LMA) Principles. The framework will govern the deployment of proceeds from sustainability bond and loan issuances towards financing projects and companies that deliver positive environmental and social impact. The framework also addresses the mechanism via which undeployed sustainability bond and loan proceeds will be managed, and how allocation and impact reporting will take place for the benefit of current and prospective stakeholders.

Mr. Majed Essa Al Ajeel, Chairman of Burgan Bank Group, declared: “This framework is a core component of the bank’s broader sustainability agenda. This agenda was developed in response to a rapid, global shift towards sustainability and in light of Kuwait’s New Vision 2035, which contributes to the achievement of a number of the United Nations’ Sustainable Development Goals”.

Mr. Masoud M.J. Hayat, the Vice Chairman and Group CEO of Burgan Bank Group, stated: “We are proud that Burgan is the first Kuwaiti bank and one of the first regional banks to establish a sustainable financing framework. This initiative demonstrates the bank’s upmost commitment to sustainability and positions it to be a key and leading player in the transformation Kuwait and other regional countries to more sustainable economies”.   

“Strategically, the framework is a conduit for matching international financiers that have deep-rooted sustainability values together with like-minded bank clients looking to undertake sustainability initiatives for the benefit of many communities”, added Mr. Hayat.

Ms. Dalal Yousef Al Sane, Head of Debt Capital Markets at Burgan Bank, elaborated: “Emerging markets are expected to actively pursue environmentally and socially responsible ways to fund renewable energy, education and healthcare projects, among many other impactful sustainability initiatives. This, coupled with the relative scarcity of sustainability bond and loan issuances from emerging markets, is expected to significantly augment the aggregate value and volume of such issuances in the coming years.” 

“To facilitate the inflow of sustainability funds, key economic agents in emerging markets are progressively addressing the international investor communities’ demand for transparency about sustainability plans, activities and targets. Consequently, the establishment of sustainable financing frameworks that outline the eligibility criteria for financing sustainability projects and companies is becoming increasingly important,” added Ms. Al Sane.

HSBC acted as the sole ESG Structuring Agent for the framework. Burgan Bank obtained a Second-Party Opinion on the framework from a leading international Second-Party Opinion Provider, which assessed the framework’s alignment with the applicable ICMA and LMA Principles.