Jordan Kuwait Bank (JKB) has issued its second green bond, with the International Finance Corporation (IFC) committing up to $100 million as an anchor investor.
The transaction builds on JKB’s entry into the green bond market in 2023 and is designed to channel financing toward projects with environmental benefits across Jordan.
The Amman-based bank, which has total assets of approximately $7.7 billion, will use proceeds from the latest issuance to finance projects in areas including renewable energy, energy efficiency, sustainable transport, blue finance and certified green buildings.
The bond is structured in accordance with the International Capital Market Association’s Green Bond Principles and JKB’s Green Finance Framework. These frameworks set requirements for how proceeds are allocated and how their use is reported to investors.
Focus on Green and Sustainable Projects
The proceeds will support a range of projects intended to improve energy efficiency, expand renewable energy and promote more sustainable infrastructure.
Eligible investments include renewable energy developments, energy-efficiency projects, certified green buildings and sustainable transportation initiatives. The financing will also include projects connected to blue finance, which generally covers investments linked to the sustainable use and protection of marine and water resources.
The structure is intended to give investors greater visibility into how the funds raised through the bond are being used.
IFC Provides Anchor Investment
The IFC’s commitment of up to $100 million makes the development finance institution a key participant in the transaction.
The investment follows the IFC’s involvement in JKB’s first green bond in 2023 and strengthens the partnership between the two institutions on sustainable finance in Jordan.
The latest transaction also includes support from the IFC-UK Market Accelerator for Green Construction (MAGC), a blended-finance programme backed by the UK’s Department for Energy Security and Net Zero.
MAGC is designed to encourage financing for certified green buildings in emerging markets by helping reduce some of the risks associated with such projects.
The inclusion of the programme gives the transaction an additional performance-based element linked to verified green-building outcomes.
Supporting Jordan’s Sustainable Finance Market
The new bond comes as Jordan continues to develop its sustainable finance market.
The Central Bank of Jordan has established a Green Finance Strategy aimed at encouraging financial institutions to incorporate environmental considerations into lending and investment decisions.
For JKB, the latest issuance expands its use of capital markets to finance projects aligned with these objectives.
The bank’s chief executive, Haethum Buttikhi, said the transaction would help direct capital toward projects capable of generating environmental and economic benefits while supporting Jordan’s Economic Modernisation Vision.
IFC regional industry director for financial institutions Momina Aijazuddin said the partnership is intended to support sustainable growth and job creation in Jordan.
Growing Interest in Green Bonds
Green bond activity has increased across the Middle East and North Africa in recent years, although issuance remains concentrated in larger markets such as the United Arab Emirates and Saudi Arabia.
Jordan’s market is smaller, making bank-led transactions such as JKB’s significant for the development of private-sector sustainable finance.
The involvement of an international development institution such as the IFC can also help attract investors to emerging-market green bonds by providing additional institutional participation.
For JKB, the second issuance represents a continuation of its green-finance strategy and provides another channel for funding environmentally focused projects.
The performance of the bond and the development of future green-finance transactions will provide further indications of how sustainable finance continues to develop within Jordan’s banking and capital markets.
Disclaimer: This article is for informational purposes only and does not constitute legal, tax, investment, financial or other professional advice.
