The market for green and sustainable bonds and sukuk in the Gulf economies set a new record in 2022, with the issue count more than doubling as notable government-related entities and banks entered the market, according to data from Bloomberg’s Capital Markets League Tables.
Total 2022 Gulf Co-operation Council (GCC) green and sustainable bond and sukuk issuances reached $8.5bn from 15 deals compared to $605mn from six deals in 2021.
Saudi Arabia was the leading issuer within the region, accounting for more than 50% of total volumes, with the UAE accounting for the remaining issue volume.
In 2021, all GCC issuances were generated by the UAE only.
The GCC region bucked the global trend which saw sales of new green and sustainable bonds and sukuk around the world decrease by 14% to $739bn during 2022, in part due to global uncertainty and the rising interest rate environment, it said.
Within the Gulf region, 2022 saw notable debut issuances such as $3bn green bond from Saudi Arabia's Public Investment Fund; $750mn debut sustainable sukuk from Dubai Islamic Bank; $750mn debut sustainable sukuk from Saudi National Bank; and $500mn green bond from Abu Dhabi Commercial Bank.
Among established issuers, First Abu Dhabi Bank remained among one of the region’s leaders in 2022 with three green bond issuances accounting for approximately $1.49bn during the period.
"Following COP27 in Egypt and ahead of COP28 in the UAE, the trajectory of the wider region’s green finance market has taken on new significance. 2022 proved to be a record year for green and sustainable bonds and sukuk in the Gulf, whereby the debut of several notable government-related entities and banks suggests sustainable finance is continuing to enter the mainstream in the region,” said Venty Mulani, data specialist-sustainable fixed income, Bloomberg.
