Green mortgages have now been granted in the UAE as HSBC bank has issued mortgages under the sustainable financing option that will aim to help the country meet its commitments to the Paris Climate Agreement.
The three loans were approved for HSBC customers purchasing houses in The Sustainable City community in Dubai. The bank offers an interest rate discount of 0.25 percent for properties that meet certain sustainable criteria, and a 50 percent discount on applicable arrangement fees.
Climate change has become a global pressing issue, and governments and private entities are racing to find new ways to incentivise green investment while working towards meeting climate goals under the Paris Climate Agreement.
In the UAE, the country has set targets to limit greenhouse gas emissions over the next decade by 23.5 percent, with a focus on increasing clean power capacity, especially through solar and nuclear energy.
“Sustainable development is more important now than it’s ever been, and it’s vital that banks support customers with competitively priced green finance, and to encourage more sustainable behaviours,” said Daniel Robinson, head of wealth and personal banking at HSBC UAE.
HSBC is expecting to provide between $750 billion and $1 trillion in sustainable financing and investment by 2030 as clients switch to more sustainable ways of doing business. The bank aims to be net-zero in its own operation by 2030.
In January 2021, HSBC formed a dedicated sustainable and transition finance team (STFT) in the Middle East to help institutions, corporates and individuals transition to a more sustainable economy. HSBC saw a six-fold increase in 2020 over the previous year in sustainable and transition finance activity in the region.
HSBC’s green mortgage product is applicable for properties that are either LEED-certified or if they meet similar requirements, and HSBC’s STFT reviews properties to validate eligibility on a case-by-case basis. As well as green mortgages, HSBC UAE’s wealth & personal banking business offers other sustainable products including green car loans and sustainable investment fund options.
“We, at The Sustainable City, are proud to be the first development in the region to have our residents benefit from the issuance of HSBC's green mortgage. With a commitment towards achieving net-zero carbon living, we have worked hard to set high standards of sustainability across all our communities and it is our great pleasure to be part of this milestone for the UAE. We would like to thank HSBC for their achievement in bringing this green mortgage to the market and their commitment to global climate action,” said Faris Saeed, Chairman of Diamond Developers, developer of The Sustainable City.
