As the first bank to launch sustainability-linked financing in the Sultanate, Bank Nizwa has consistently been setting new benchmarks in the realm. In accordance with the same, the bank recently signed a financing agreement with ASYAD Group a global integrated logistics services provider in Oman to extend sustainable finance to its subsidiary, Duqm Development Company (DDC). This is the first-of-its-kind sustainable finance deal to be signed in Oman with the terms of financing linked to predefined key performance indicators (KPIs) that encompass various Environment, Social and Governance (ESG) norms.

The agreement was signed during a ceremony held at the ASYAD Group headquarters, with Bank Nizwa represented by its Chief Executive Officer, Mr Khaled Al Kayed and ASYAD Group represented by Dr Ibrahim Al Nadhairi, the Chief Executive Officer of ASYAD Shipping and Drydock at ASYAD Group. The ceremony was attended by Mr Khalid Al Barwani, Deputy General Manager - Head of Wholesale Banking Group at Bank Nizwa and Mr Muhsin Alrustom Group Chief Financial Officer at ASYAD Group, along with several officials from both sides.

Dr Ibrahim said, "ASYAD Group has crafted a comprehensive sustainability strategy that aligns with our core values, aiming to minimise our carbon footprint. It reaffirms our unwavering dedication to environmental and social responsibilities, whilst adhering to the principles of good governance. Our objective is to establish a dynamic and supportive logistics sector that accommodates holistic development pathways, effectively addressing current demands without compromising the future generation's capacity to fulfil their aspirations and requirements."

“This strategic partnership with Bank Nizwa demonstrates our commitment to incorporating innovative sustainability elements throughout our diverse business operations, with an aim to continually improve our integrated solutions. Our main focus is to optimise efficiency, reduce costs and sustainably enhance performance. Simultaneously, we want to cement our reputation as a company that deeply supports Oman's ambitious vision of attaining carbon neutrality by 2050. To accomplish this, we actively engage in collaborations with a wide array of government and private entities. As such, our alliance with Bank Nizwa stands as a pivotal milestone in our ongoing endeavour to pioneer cutting-edge sustainability solutions,” he added.

Commenting on the agreement, Mr Khaled said, “Bank Nizwa and ASYAD Group have enjoyed strong corporate ties and we are indeed delighted to join hands with the Group as it further develops its businesses sustainably. While DDC is a strategic venture with immense potential, it also reserves the capacity to impact the environment and people. In this regard, the sustainability-linked financing agreement solidifies the commitment of the company to ensure that sustainable operations take utmost priority and that the said impact is a positive one.”

He added saying, “As a Shari’ah-compliant bank, on our part, we will continue to extend our support to ventures that strive to achieve the greater good of the community while upholding values of ethicality, integrity, and morality. It is quintessential to note that the larger community and stakeholders have become more mindful of sustainability credentials, and, therefore, it is paramount that businesses implement tangible sustainability-linked policies. As the pioneer bank to introduce sustainable financing in the Sultanate, Bank Nizwa reserves the expertise to help companies successfully navigate through the requirements, thus benefitting all parties involved.”

DDC is strongly aligned with the nation’s sustainability goals, and decarbonisation and optimum waste management including recycling are top priorities for the company. DDC also pays increased emphasis on health and safety compliance as well as employee engagement and development. As part of its community engagement initiatives, the company has also committed to leading tree plantation activities and beach clean-ups.

DDC was formed in 2010 to establish an urban residential community to serve the housing needs in Duqm while engaging in various tourism, commercial real estate development, and rental and sale activities. By 2013, the company had completed the construction of the first phase of the Duqm Frontier Town Project, a mixed-use complex in Oman, and leased it to Oman Drydock Company. Phase one of the project consisted of 344 residential units, 250 apartments, and 94 villas on 23ha of land, in addition to a clubhouse with a retail area, several sports amenities as well as a dedicated operations and maintenance building. Currently, the company is working on an expansion plan for Duqm Frontier Town, aiming to increase the number and types of residential units whilst adding several utility and commercial facilities. Since 2017, Bank Nizwa has been supporting DDC’s value-driven ventures and the recently signed MoU further reaffirms the strong relationship between both parties. 

With a number of diverse and quantifiable KPIs outlined by the company, Bank Nizwa, through this agreement, has adopted a holistic approach to promoting sustainability in an endeavour to further promote balanced, long-term socio-economic growth. The bank’s inherent zeal to promote sustainability-linked financing also mirrors Oman’s unfaltering vision to achieve net-zero emissions, foster a green and circular economy, and position itself as a country that has an excellent track record of promoting sustainability.

At the same time, the finance will help in boosting DDC’s capital efficiency and its ability to contribute to nurturing a sustainable society. By partnering with vital players in the market to finance key national projects, Bank Nizwa has been able to reinstate the importance of embracing sustainability and ESG practices into business.