2:39 pm - September 29, 2026
UAE green sukuk issuance fell to zero in the first half of 2026, Moody’s said, down from 1.7 billion US dollars a year earlier, as GCC issuers pulled back and awaited a second-half recovery.
UAE green sukuk issuance dropped to zero in the first half of 2026, according to a new Moody’s analysis of the Gulf sukuk market, down from $1.7bn a year earlier. Total UAE sukuk issuance across sovereigns, banks and corporates also fell, dropping 67% to $4.6bn in the same period, from $13.9bn in the first half of 2025.
The decline was steeper than the wider region managed. Sovereigns, banks and corporates in the UAE all cut back issuance at once, a pattern Moody’s linked to reduced funding needs and issuers pushing planned deals into later in the year. Regional conflict during the period disrupted borrowing plans across the Gulf, prompting issuers to adjust the timing of sovereign funding and liability management operations, even as underlying financing needs stayed largely intact across the wider economy.
Wider Gulf pullback
Moody’s tracked a broader slide across the Gulf Cooperation Council, where total sukuk issuance fell 23% to $51.1bn in the first half of 2026, from $66bn a year earlier. Saudi Arabia stayed the region’s largest issuer despite the decline, with sovereign issuance down 29% to $18.4bn and bank issuance down 30% to $6.9bn. Corporate sukuk issuance moved the other way, rising 59% to $8.8bn, as companies stepped in where sovereigns and banks pulled back.
Other Gulf markets moved in different directions. Kuwait’s issuance dropped to $1bn from $4.5bn, and Bahrain slipped to $2.9bn from $3.8bn. Oman bucked the regional pattern, with issuance rising to around $1.2bn as the sultanate continued to build out its own domestic sukuk programme.
The pullback in UAE green sukuk issuance mirrors a global retreat. Worldwide green sukuk issuance fell 53% to $2.4bn in the first half of 2026, from $5.1bn a year earlier. Saudi Arabia contributed $2.1bn of that total and Indonesia $300m, while the UAE, which issued $1.7bn of green sukuk in the same period last year, recorded none in 2026.
Track record before the pause
UAE issuers built a track record in the format well before this pause. UAE entities led the region’s sustainable bond issuance in 2024, and companies including Tabreed and Omniyat have used green sukuk to fund clean cooling and sustainable property projects respectively. Abu Dhabi and Dubai have spent recent years building out sustainable and Islamic finance activity side by side, including a dedicated green bonds framework from the UAE Securities and Commodities Authority designed to widen the pool of eligible issuers and investors across the market.
The first-half gap lines up with a broader slowdown across Gulf debt capital markets during a period of regional instability. UAE issuers retain the infrastructure and the track record to return to the format once conditions stabilise, and the underlying frameworks that support green issuance remain in place.
Moody’s expects issuance in the region to recover gradually in the second half of 2026, provided the ceasefire broadly holds, and market conditions remain stable. The agency projects global sukuk issuance of $140bn to $150bn in the second half, which would bring the full-year total to around $280bn, in line with 2025’s total.
A second-half recovery would give UAE clean energy, cooling and property developers a renewed route to fund projects that support the country’s net zero targets, restoring a UAE green sukuk market that raised $1.7bn as recently as last year. How quickly UAE issuers re-enter the format will show how far this year’s regional disruption has reshaped near-term appetite for green Islamic finance in the emirates.
