MENA and Asia-Pacific sustainable debt nearly tripled since 2020, driven by energy and innovative finance

Labelled sustainable debt issuance across the Middle East, North Africa (MENA), and the emerging Asia-Pacific regions has seen an extraordinary jump, almost tripling since 2020, to hit about US$94 billion. Honestly, this rapid pace makes these developing markets some of the fastest-growing players in the global sustainable finance scene. This info comes from a recent joint report published in late 2025 by the Dubai Financial Services Authority (DFSA), the Hong Kong Monetary Authority (HKMA), and BloombergNEF.

The report notes that over half of this sustainable debt is made up of green instruments, largely driven by big energy infrastructure projects. Renewable energy, in particular, stands out as the top sector, attracting roughly 36 percent of all labelled bonds. Countries like the UAE and Saudi Arabia continue to dominate, together contributing nearly 75 percent of MENA’s labelled debt issuance since 2023.

In fact, 2023 was a milestone year: green bond issuances in MENA shot up by 155 percent, reaching a record US$24 billion. The UAE led the charge with US$10.7 billion, which is a huge jump, about 170 percent compared to previous years, and made up around 45 percent of the region’s green bond market. Saudi Arabia also played a key role, issuing US$6.7 billion worth of green bonds, underscoring how these two nations are really pushing the green finance agenda forward in the Arab world.

This growth aligns pretty closely with national goals focused on ramping up clean energy and sustainability efforts. The UAE’s Energy Strategy 2050 and Dubai Clean Energy Strategy 2050 remain at the core, helping establish a vibrant ecosystem that positions the UAE as a regional hub for sustainable finance. And, interestingly enough, the UAE Sustainable Finance Working Group has recently floated draft principles for climate transition planning, basically trying to steer institutions towards more credible, transparent approaches to sustainable finance, with better disclosure and accountability.

On top of that, innovative financial tools are gaining ground across the region. For example, the report highlights a blue bond issued by DP World, which targets ocean and marine resources; a sustainability-linked loan bond from Emirates NBD that’s tied to specific environmental goals; and a long-tenor green bond issued by Hong Kong’s MTR Corporation. These examples show how the market is evolving, moving beyond just classic green bonds into more sophisticated and diversified products.

However, despite these positive developments, the report points out that a lot of potential remains untapped. Many issuers in MENA and emerging Asia-Pacific still heavily depend on unlabelled financing structures for projects with sustainability ambitions. Maybe it’s because regulations aren’t strict enough yet, or because companies need time to get comfortable with green finance tools, either way, this suggests that labelled sustainable debt could grow even more as frameworks get clearer and more familiar.

Regulators in the region are also stepping up their support. They’re rolling out new frameworks aimed at facilitating transition finance and social bonds, along with tightening disclosure rules. The collective efforts of policymakers, investors, and industry players will be a big topic at the upcoming DFSA–HKMA Joint Climate Finance Conference, set to take place in Dubai on 26 November 2025. This event is expected to boost cross-border collaboration, a crucial step toward speeding up low-carbon growth and encouraging a more sustainable economic shift in the region.

Looking at the first half of 2025, data shows a continued commitment to sustainable finance: MENA’s Green, Social, Sustainable, and Sustainability-Linked (GSSS) bonds alone reached US$9.47 billion. Saudi Arabia contributed about 66 percent of that total, with the UAE accounting for 34 percent, further cementing their roles as key players in green finance.

All in all, the fact that labelled sustainable debt has nearly tripled in just five years signals a major transformation in the financial markets of MENA and emerging Asia-Pacific. With strong government backing, innovative financial products, and more active market participants, the region seems well-positioned to stay at the forefront of sustainable finance. This momentum isn’t just about hitting climate targets, it’s also about supporting social and economic progress, aligning with the global push toward net-zero emissions.

Source: Noah Wire Services