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Treasury announces new report as part of its efforts to support sustainable financial growth
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During COP27 in Sharm El Sheikh, Egypt, the UAE Ministry of Climate Change and Environment (MoCCAE) co-hosted a fireside chat with the Global Green Growth Institute (GGGI) on its Green Bond and Sukuk Initiative.
During the meeting, the ministry announced the release of an analysis of new developments in the green bond and sukuk markets as part of the UAE’s efforts to support sustainable financial development in the country.
The discussion was moderated by Essa Al Hashmi, Assistant Under-Secretary, Sustainable Communities Division, Ministry of Climate Change and Environment, and by Mercedes Vela Monserrate, Head of Sustainable Finance, Abu Dhabi Global Markets (ADGM).
“MOCCAE is working with its strategic partners to raise awareness among key financial and investment players of the importance of green bonds and sukuk as effective financial instruments for sustainable development,” said Al Hashmi.
“We have made great strides in developing a sustainable financial sector. The UAE is one of the most active countries in the region to issue green bonds and sukuk, and the UAE Green Bond and Sukuk Project Development: A Situation Analysis contribute to a favourable environment for financial activity,” he added.
The report notes that despite the increased adoption of green financial instruments, they may not be fully understood by the wider financial services community. Therefore, the document aims to help bridge any information gaps by laying out the fundamentals of green bonds and sukuk, as well as the current market conditions in the UAE.
It also makes recommendations for the further development of the domestic sustainable financial market.
The report builds on the UAE’s Sustainable Finance Framework, launched in January 2021, to support investment in low-carbon, environmentally sustainable and climate-resilient projects.
The combined domestic market value of green sukuk, bonds and loans has reached nearly $17 billion over the past few years. The global green sukuk market size is estimated to be $1 trillion by 2020.
The report discusses current approaches to issuing green bonds and sukuk, while detailing their ability to provide comprehensive and cost-effective financing. It also connects parties with tangible bankable projects with large financial institutions such as pension funds.
The document will serve as a tool and enabler to bridge the gap between stakeholders and encourage more sustainable financing practices.
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