**Dubai**: The UAE has emerged as the leader in sustainable bond issuance in the Middle East for 2024, with $7.4 billion raised. This growth is bolstered by significant commitments from financial institutions, particularly in energy projects, and forecasts suggest continued upward momentum in the coming years.
The UAE has emerged as the leader in the sustainable bond issuance market in the Middle East for the year 2024, with total issuances reaching an impressive $7.4 billion, according to a report by S&P Global. This report provides an insightful outlook on sustainability bond and sukuk issuances, highlighting that financial institutions in the UAE contributed the largest share of these sustainable bonds. The strong momentum in the market is further supported by the UAE Banks Union’s commitment announced during the COP28 conference, which aims to mobilise over 1 trillion dirhams (approximately $272 billion) in sustainable financing by the year 2030.
Notably, nearly 60% of the green bond issuances are centred around energy projects, including the burgeoning solar energy sector. Other sectors showing significant interest include logistics, real estate, tourism, and hospitality. The report indicates that twelve financial institutions in the UAE issued sustainable bonds in the past year, with sustainable sukuk constituting 30% of the total issuances.
Dubai Islamic Bank led the pack with an issuance of $1 billion, followed by Abu Dhabi National Energy Company (Taqa) at $850 million. Other notable issuers included Abu Dhabi First Bank with $800 million, Emirates Islamic Bank and Sharjah Emirate, both with $750 million, and Ras Al Khaimah Bank, which issued a social bond worth $600 million. The report also noted additional issuances, including a sustainability bond from Sharjah Emirate valued at $545 million and two issuances by Masdar amounting to $500 million each. The total also featured a green bond from Aldar Properties and an issuance from DP World of $100 million.
The report further highlights a growing trend in the region, forecasting that sustainability bond issuances in Middle Eastern markets are likely to continue on an upward trajectory, with total issuances projected to be between $18 billion and $23 billion in 2025. It is anticipated that issuers in the UAE and Saudi Arabia will maintain their leadership roles in sustainable bond markets, despite expected increases in participation from issuers in other countries.
S&P Global’s analysis suggests that the greatest percentage of issuances will continue to be dedicated to green projects, aligning with national objectives for climate neutrality, particularly in the clean energy sector. With banks leading the charge in this space, the report highlights the increasing presence of sustainable bonds in the region, indicating a shift towards incorporating both environmental and social dimensions into financial frameworks.
The report also delves into sustainable sukuk, reflecting that regional interest is likely to endure into 2025. It notes that the decline in issuances from 2024 is primarily due to the normalisation of market conditions following the COP28 conference, as well as rising interest rates. The UAE and Saudi Arabia combined account for over half of the regional issuances, with Qatar and Kuwait also playing a role.
The total size of sustainable sukuk issuances in the Middle East reached $7.9 billion, predominantly in Saudi Arabia, and is expected to rise, with sustainable sukuk anticipated to represent more than 35% of regional sustainable bond issuances in 2024, up from about 26% at the end of 2023. The agency emphasised the importance of the guidelines for green, social, and sustainable sukuk published by the International Capital Market Association (ICMA) in April 2024, stating that these guidelines will likely enhance transparency and stimulate renewed interest in classified Islamic financing issuances. The potential for governmental and regulatory initiatives to sustain this growth has also been acknowledged, indicating robust prospects for the sustainable finance sector in the region.
Source: Noah Wire Services
- https://www.arabnews.com/node/2575501/business-economy – This article supports the claim that the UAE and Saudi Arabia are leading the Middle East’s sustainable bond market, with issuances reaching $16.7 billion in the first nine months of 2024. It also highlights the role of financial institutions in driving sustainability bond issuances.
- https://esgnews.com/middle-east-issued-16-7-billion-in-sustainable-bonds-from-january-to-september-2024-sp-global-ratings/ – This report corroborates the $16.7 billion in sustainable bond issuances in the Middle East during the first nine months of 2024, led by the UAE and Saudi Arabia. It also notes the dominance of sustainability bonds over green bonds in the region.
- https://www.zawya.com/en/capital-markets/bonds/uae-saudi-arabia-to-lead-25bln-sustainable-bond-issuance-forecast-in-2025-c6t55erl – This article forecasts that sustainable bond issuances in the Middle East will reach between $18 billion and $23 billion in 2025, with the UAE and Saudi Arabia maintaining their leadership roles. It also mentions the significant role of sustainable sukuk in the region.
- https://www.arabnews.com/node/2575501/business-economy – This article provides additional context on the growth of sustainable sukuk, noting that their share in the region’s sustainable bond issuances increased to around 35% to 40% in 2024. It highlights Saudi Arabia’s dominance in sustainable sukuk issuances.
- https://esgnews.com/middle-east-issued-16-7-billion-in-sustainable-bonds-from-january-to-september-2024-sp-global-ratings/ – This report emphasizes the shift towards funding both environmental and social projects in the Middle East, contrasting with global trends where green bonds are more prevalent. It notes that financial institutions are driving sustainability bond issuances.
- https://www.zawya.com/en/capital-markets/bonds/uae-saudi-arabia-to-lead-25bln-sustainable-bond-issuance-forecast-in-2025-c6t55erl – This article mentions the decline in sustainable bond issuances in 2024 due to post-COP28 normalization and rising interest rates. It also highlights the growing interest in sectors like logistics and real estate.
- https://www.aletihad.ae/news/%D8%A7%D9%84%D8%A7%D9%82%D8%AA%D8%B5%D8%A7%D8%AF%D9%8A/4557313/%D8%A7%D9%84%D8%A5%D9%85%D8%A7%D8%B1%D8%A7%D8%AA-%D8%AA%D9%82%D9%88%D8%AF-%D8%B3%D9%88%D9%82-%D8%A5%D8%B5%D8%AF%D8%A7%D8%B1%D8%A7%D8%AA-%D8%A7%D9%84%D8%B3%D9%86%D8%AF%D8%A7%D8%AA-%D8%A7%D9%84%D9%85%D8%B3%D8%AA%D8%AF%D8%A7%D9%85%D8%A9-%D8%A8%D8%A7%D9%84%D8%B4%D8%B1%D9%82-%D8%A7%D9%84%D8%A3%D9%88%D8%B3%D8%B7 – Please view link – unable to able to access data
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
9
Notes:
The narrative references recent data from 2024 and future projections for 2025, indicating it is up-to-date. However, without further online verification, it cannot be confirmed if the content is entirely original or if similar reports have been published.
Quotes check
Score:
0
Notes:
There are no direct quotes in the narrative to verify.
Source reliability
Score:
8
Notes:
The narrative cites S&P Global, a reputable financial analysis firm, but the original publication source is not well-known globally. This reduces the reliability score slightly.
Plausability check
Score:
9
Notes:
The claims about sustainable bond issuances and projections align with current trends in sustainable finance and are plausible given the context of COP28 and national climate objectives.
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): HIGH
Summary:
The narrative appears to be fresh and plausible, referencing recent data and trends in sustainable finance. While the source reliability is somewhat reduced due to the publication’s lesser-known status globally, the use of reputable data from S&P Global supports the overall credibility.
