UAE green bonds, sukuk issuance hit Dhs15bn, says SCA

The UAE’s Securities and Commodities Authority (SCA) said Monday that a record amount of debt has been raised by green bonds and sukuk by issuers as the country is hosting the COP28 climate conference in Dubai.

The markets regulator said the total value of green bonds and sukuk issued in the Gulf state reached around Dhs15.45bn during the first 11 months of 2023.

Speaking on the sidelines of the ongoing COP28 climate summit Mohamed Ali Al Shorafa, chairman of SCA said, “Issuing green bonds and sukuk is one of the transformational projects in supporting the efforts to make the UAE the new global economic hub for the next ten years.”

UAE authorities have been encouraging issuers to raise green and sustainability-linked bonds, and sukuk as part of a broader strategy aimed at accelerating the country’s transition to a low-carbon economy.

SCA said in June that companies would be exempted from listing fees on the local market this year for green or sustainability-linked bonds or sukuk.

Al Shorafa said the authority’s decision to exempt companies from paying listing fees “marked a significant start in the growing demand for the issuance of these Sukuk and bonds.”

Earlier in December, Dubai’s financial regulator also said it had waived all regulatory fees for issuers wishing to list sustainability-related debt securities in the Dubai International Financial Centre throughout 2024.

The Dubai Financial Services Authority said fee waiver applies to all ESG-related bonds and sukuk labelled as green, social, sustainable, sustainability-linked, climate, climate adaptation and climate transition.

Burnishing UAE’s green credentials

Meanwhile, to further mobilise and bolster the sources of financing for sustainable projects in the UAE, banks in the country pledged to mobilise Dhs1tn ($270bn) in green finance.

The mobilisation of green finance advances the forward-looking sustainable finance ambitions of the UAE and sets the foundations for enabling sustainable transformation and climate action.

First Abu Dhabi Bank (FAB) pledged to facilitate Dhs500bn in sustainable and transition financing by 2030, a commitment that represents half of the combined Dhs1tn green finance pledge that was made by UAE banks at COP28.

The new target, an 80 per cent increase over FAB’s 2021 commitment of Dhs275.4bn, represents the largest sustainable finance commitment made by any bank in the Middle East region to date.

Similarly, Mashreq said it would facilitate Dhs110bn in sustainable finance by 2030, building on the bank’s years of sustainable finance deployment and ongoing efforts that have seen it facilitating financing for multiple adaptation-related projects in Egypt, the UAE, Qatar, Saudi Arabia and Bahrain.

Read: DFSA scraps regulatory fees on ESG listings on Nasdaq Dubai