Jordan Kuwait Bank issues the first green bond in Jordan

Mar 12, 2023


Jordan Kuwait Bank (JKB) has announced the issuance of the first green bond in Jordan for the amount of USD 50 million. This pioneering step paves the way for issuing more green bonds in the Kingdom; unleashing financing Jordan’s economic transformation into a green economy and developing a new asset class to the Jordanian capital market to finance sustainable and environmentally friendly projects that aim to reduce greenhouse gas emissions and unemployment rates.  

This issuance of the first green bond in Jordan, comes in line with Jordan’s Economic Modernization Vision and the national action plans for green growth (2021-2025) for agriculture, energy, tourism, transportation, waste, and water. These plans were developed to expand Jordan’s climate ambitions and sustainable development by integrating the green growth plan, climate change, and the sustainable development goals in the various sectors. Moreover, the bond will be fully compliant with the International Capital Market Association’s green bond principles, which offer best practices to issuers with regard to transparency and disclosure.

IFC is investing up to USD 50 million in the five-year bond, issued by Jordan Kuwait Bank. The financing comprises up to $36 million from IFC’s own account, and a blended finance co-investment of up to $10 million from the Canada-IFC Blended Climate Finance Program and $4 million from the Dutch-funded MENA Private Sector Development Facility, both implemented by IFC.

 This investment affirms the strength of the private sector in Jordan and the desire of international entities in contributing towards elevating sustainable investments. This collaboration affirms Jordan Kuwait Bank’s interest in establishing strong and influential partnerships that contribute to the development of a responsible banking sector and a green economy, while supporting the bank’s efforts to create a positive impact on the society and environment as well as generating attractive returns for investors.

Jordan Kuwait Bank will earmark the proceeds for green projects and assets – including renewable energy projects, low-carbon vehicles, green infrastructure such as low-carbon transport, new energy-efficient green buildings, and sustainably managed water resources and waste.

The bank's commitment to funding these initiatives reflects its dedication to promoting environmentally conscious practices, contributing to a more sustainable future, and creating long-term value for its stakeholders.

H.E. Dr. Adel Al-Sharkas, Governor of the Central Bank of Jordan stated: “This initiative represents a groundbreaking achievement, not only for the financial sector but for the entire Kingdom. The issuance of green bonds will provide investors with the opportunity to support projects that promote clean energy, reduce carbon emissions, and support sustainable development in Jordan.”

The Minister of Environment, His Excellency Dr. Muawieh Radaideh, stressed on the private sector’s role to confront the effects of climate change and achieving the sustainable development goals. The launch of green bonds will facilitate access to green financing to assist small and medium-sized enterprises and individuals to implement environmentally friendly projects to reduce energy consumption, the use of renewable energy and other activities with an environmental dimension, as well as facilitate access to global markets and reduce the carbon footprint.

On this occasion, Mr. Haethum Buttikhi, CEO of Jordan Kuwait Bank said: “We are introducing a new asset class to the Jordanian capital market that is designed towards building an environmentally sustainable and responsible banking industry. The partnership with IFC supports JKB’s strategy in advancing its positioning and adaptability to the current and potential demand for sustainable financing by providing innovative financing solutions in the Jordanian market. This significant initiative further aligns with Jordan’s Modernization Vision in which sustainability is a cornerstone of this vision”.

“Mobilizing private sector financing and exploring innovative financing options for climate mitigation and resilience projects are crucial to address the drivers and impacts of climate change,” said Khawaja Aftab Ahmed, IFC Regional Director for the Middle East, Pakistan, and Afghanistan. “We hope this first green bond will not only promote climate-smart, sustainable projects in Jordan, but also set the standard for green bonds in the market and encourage others to follow suit.”

It is noteworthy that Jordan Kuwait Bank was one of the first banks to invest in the establishment of a solar energy plant to cover the majority of its energy consumption by relying on sustainable energy solutions, and the first bank in Jordan to  be LEED GOLD-certified by the U.S. Green Building Council (USGBC), the most widely used green building rating system in the world and an international symbol of excellence.