MENA green bond and sukuk issuances hit new annual record of $24bn in 2023

Annual issuances of green social, sustainable, and sustainability-linked bonds (GSSB) in the Middle East and North Africa (MENA) hit a new record in 2023 of approximately $24bn, according to data from Bloomberg’s Capital Markets League Tables.

The 155% increase was driven primarily by growth in the UAE and Saudi Arabia, which together accounted for 77% of total regional issuances.

The UAE led regional green bond league tables in 2023, with sales reaching $10.7bn, up nearly 170% and accounting for approximately 45% of regional totals. The year in which the UAE hosted COP28 was notable for the large number of debut sustainable debt issuances from the country’s corporates and government entities, which amounted to $7.95bn in total.

The 11 debut green issuers included bonds or sukuk from DP World sukuk ($1.5bn), Sharjah government ($1bn), TAQA ($1bn), Emirates NBD ($750mn), Masdar ($750mn), Mubadala ($750mn), Aldar sukuk ($500mn), Commercial Bank of Dubai ($500mn) and Five Holdings ($350mn), in addition to green Sukuk from Dubai Islamic Bank ($750mn) and Abu Dhabi Islamic Bank ($500mn)

Saudi Arabia accounted for 32% of total regional volumes, up 69% year-on-year. Saudi Arabia’s Public Investment Fund was the region’s largest issuer in 2023, driven by issuances of $5.5bn in February 2023. Other notable Saudi issuers were Saudi National Bank ($60.69mn), Saudi Electricity Company ($1.2bn) and Al Rajhi Bank ($1bn).

2023 was a milestone year for green Sukuk as Islamic issuances accounted for more than a quarter of MENA totals for the first time. Green Sukuk totalling approximately $6.5bn were issued in the MENA region in 2023, representing more than half of all global green Sukuk, with notable sales by ADIB ($500mn), DP World ($1.5bn), First Abu Dhabi Bank (approximately $350mn), Majid Al Futtaim ($500mn), and Aldar ($500mn).

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

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