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MENA green bonds see 155% jump in issuances; UAE, Saudi Arabia lead

MENA green bonds see 155% jump in issuances; UAE, Saudi Arabia lead
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Mubasher: The UAE and Saudi Arabia have dominated regional green bond league tables in 2023 with a combined 77% of total issuances in MENA, based on data from Bloomberg’s Capital Markets League Tables.

The region witnessed an annual surge of 155% in issuances of green social, sustainable, and sustainability-linked bonds (GSSB) that hit a new record close to $24 billion.

The UAE led MENA green bonds’ issuances with sales standing at $10.70 billion, which came 170% higher and accounted for nearly 45% of regional totals in 2023.

UAE corporates and government entities recorded $7.95 billion worth of issuances in total, while the 11 debut green issuers included bonds or Sukuk from the following:

DP World Sukuk with $1.50 billion

The Government of Sharjah with $1 billion

Abu Dhabi National Energy (TAQA) with $1 billion

Emirates NBD, Masdar, and Mubadala with $750 million each

Aldar sukuk as well as Commercial Bank of Dubai (CBD) each with $500 million

Five Holdings with $350 million

This was in addition to green Sukuk worth $750 million from Dubai Islamic Bank (DIB) and $500 million from Abu Dhabi Islamic Bank (ADIB).

Saudi Arabia followed the UAE with 32% of total regional volumes, registering an annual increase of 69%.

The Public Investment Fund (PIF) was the region’s largest issuer in 2023, driven by issuances of $5.50 billion in February 2023.

The other notable Saudi issuers were Saudi National Bank (SNB) with $60.69 million, Saudi Electricity Company (SEC) with $1.20 billion, and Al Rajhi Bank with $1 billion.

Green Sukuk worth a total of $6.50 billion were issued in the MENA region in 2023, representing more than half of all global green Sukuk, with notable sales of $500 million by ADIB, $1.50 billion by DP World, and nearly $350 million by First Abu Dhabi Bank (FAB). This was in addition to Majid Al Futtaim and Aldar with $500 million each.

Data Specialist - Sustainable Fixed Income at Bloomberg LP, Venty Mulani, said: “2023 was a record-breaking year for green bonds in the MENA region.”

Mulani explained: “A wave of UAE corporates made their debuts as the country geared up to host to COP28, while Saudi Arabia accounted for approximately a third of total regional sales. As COP moves from the MENA region for the first time in two years, the direction of the green bond market in 2024 will be shaped by developments in borrowing costs, regulations, and taxonomies.”

Meanwhile, Qatar is expected to sell its first green bond soon as cited from the state Minister of Finance, Ali Al Kuwari, at the World Economic Forum in Davos.