Emirates Development Bank to finance UAE renewables sector

Emirates Development Bank (EBD) has added ‘renewables’ to its priority sectors for financing, as part of its commitment to support the UAE’s net zero initiatives and sustainable development agenda.

The addition of ‘renewables’ to the bank’s list of key sectors to support is a strong reflection of the development lender’s desire to ensure it aligns with national development goals – which now have a strong focus on sustainability, carbon emission reduction and renewable energies.

The development bank is now two years into an ambitious five-year strategy aimed at empowering SMEs and large corporates in five priority sectors such as renewables, manufacturing, technology, healthcare and food security.

The bank seeks to deploy Dhs30bn in financing support to 13,500 companies within these sectors by 2026.

EDB believes that financing renewables and energy efficiency is critical to achieving the UAE’s Net Zero by 2050 goals and driving sustainable development in line with global efforts. https://t.co/Ftlih8SNle

— Emirates Development Bank (@EDB_UAE) May 10, 2023

“EDB is redoubling its efforts to support companies operating in the renewables sector, maximising support for sustainable development and advanced low-carbon industries in line with the UAE’s Net Zero ambitions,” said Ahmed Mohamed Al Naqbi, CEO of EDB.

The bank can offer financing up to 100 per cent of a renewable energy project value with a maximum tenor of 15 years and a two-year grace period.

“Our support to the businesses and projects addressing the challenges and opportunities in the renewables sector has two goals: firstly, to support the UAE’s goal to achieve net-zero emissions by 2050. Secondly, to solidify the UAE’s position as a pioneering global hub for renewable energy technology and manufacturing, by cultivating a favourable environment for businesses of all sizes to operate in,” added Al Naqbi.

The bank is also working towards the goals and ambitions laid out in the UAE Centennial 2071 vision, which include helping develop a future-focused government and a diversified knowledge economy.

Emirates Development Bank sustains growth

The strategic adjustment towards more focused support on renewable projects and companies in the UAE comes as EDB continues to deliver on its mission of fostering a healthy, sustainable and self-reliant economy.

The bank offers a patient debt approach with an emphasis on developmental impact. Its direct and indirect financing is offered with long tenors, higher loan-to-value ratios, lower rates and interest grace periods.

EDB is working with 11 commercial banks for its credit guarantee scheme, which offers favourable financing solutions to SMEs.

These include the Commercial Bank of Dubai, National Bank of Umm-Quwain, Emirates NBD, Abu Dhabi Commercial Bank, First Abu Dhabi Bank, Mashreq Bank, RAK Bank, National Bank of Fujairah, Dubai Islamic Bank and Emirates Islamic.

To further enable SMEs, the lender partnered with Beehive, integrating a new digital lending feature that allows eligible SMEs to apply for loans of up to Dhs5m directly through the “EDB Business Banking” app and receive approval or feedback within five days. Since its launch in September 2021, the EDB Business Banking app has successfully onboarded 2,094 customers.

The bank approved Dhs6.1bn in financing in 2022, up 673 per cent compared to the previous year. EDB approved Dhs1.8bn in financing to SMEs last year, which jumped 87 per cent compared to 2021 and a 45 per cent increase from the previous quarter.

The financing comprises Dhs1.2bn in direct financing and Dhs611m indirect financing through EDB’s credit guarantee scheme with partner commercial banks.

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