In a strategic move that bridges Islamic finance with global sustainability goals, Dubai Islamic Bank (DIB) has announced the successful launch of its first-ever Sustainability-Linked Sukuk. The landmark $1 billion issuance signifies a major shift in the market, moving beyond conventional green financing models.
A Performance-Driven Approach to Sustainable Finance
Unlike traditional Sukuk that fund specific green projects, this innovative issuance adopts a performance-linked structure. The financial terms are directly connected to DIB’s achievement of ambitious, pre-defined sustainability targets, which will be independently verified. This ensures accountability and directly supports the UAE’s strategic Net Zero by 2050 initiative.
Overwhelming Global Investor Confidence
The Sukuk was met with exceptionally strong demand from international investors, highlighting growing confidence in this new financial instrument. The offering was more than twice oversubscribed, with the order book reaching $2 billion.
Key investor distribution highlights include:
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Geographic Diversity: 67% of the Sukuk was allocated to investors in the MENA region, while Asia accounted for a record 20%—the highest Asian allocation in any of DIB’s public Sukuk issuances to date.
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Investor Profile: The issuance attracted a wide range of institutional investors, with banks and private banks taking 77%. Fund managers, insurance companies, pension funds, and sovereign wealth funds made up the remainder.
This robust demand enabled DIB to tighten the final pricing significantly, settling at a profit rate of 4.572% per annum.
Channeling Capital for Measurable Impact
Proceeds from this Sustainability-Linked Sukuk will be used to build a diversified portfolio of corporate financing. This capital will be extended to clients who are equally committed to achieving specific, measurable sustainability goals, known as Key Performance Indicators (KPIs).
Leadership and a Forward-Looking Vision
Dr. Adnan Chilwan, Group Chief Executive Officer of DIB, commented on the issuance, stating, “As the pioneer of Islamic banking, our mission has always been to lead with purpose. This Sukuk is a testament to our commitment to evolving the industry—transitioning from noble intentions to verifiable, performance-driven impact. It demonstrates how Islamic finance can be a powerful force for responsible global change.”
The issuance was conducted under DIB’s established $12.5 billion Sukuk Programme. The bank’s Sustainability-Linked Financing Framework received an independent review from Institutional Shareholder Services (ISS), which confirmed its alignment with international best practices.