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Sharm El Sheikh: As part of the participation in the 27th UN Climate Change Conference (COP27) in the Egyptian resort of Sharm El Sheikh, the UAE Ministry of Climate Change and ) cooperative UAE green bond and sukuk programme.
During the meeting, MoCCAE announced the release of a new analysis of the UAE’s green bond and sukuk markets as part of its 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).
Al Hashmi said: “Innovative financing solutions are a key enabler in our efforts to promote sustainable practices across all sectors, aiming to achieve national climate goals and accelerate our transition to a low carbon economy. MOCCAE is therefore working with its strategic partners , raising awareness among key financial and investment players of the importance of green bonds and sukuk as effective financial instruments for sustainable development.”
“Through the Dubai Declaration on Sustainable Finance and the Abu Dhabi Declaration on Sustainable Finance, as well as the UAE Sustainable Finance Framework, we have made great strides in developing the sustainable finance sector. The UAE is the region’s largest country to issue green and sukuk bonds. One of the active countries, the UAE Green Bond and Sukuk Project Development: Situation Analysis report aims to contribute to an enabling environment for sustainable financial activities,” 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.
In preparing the document, MOCCAE gathered insights from leading financial institutions and relevant public sector stakeholders to assess their market readiness for issuing and investing in green bonds and sukuk, as well as the needs and priorities for developing a green fixed income market domestic.
In line with its vision of wise leadership, the UAE seeks to build a better future for present and future generations by identifying innovative solutions that support national efforts to protect the environment and drive sustainable economic development by strengthening its position as a global hub for sustainable development.
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 at USD 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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