- Green bond issuances in the MENA region surged to $15.5 billion in 2023, driven by the UAE and Saudi Arabia.
- The UAE’s green bond sales reached $8.7 billion, significantly more than previous years.
- Saudi Arabia issued $6.7 billion in green bonds, marking substantial growth.
- Sub-Saharan Africa saw a 125% increase in green bond issuances, led by South Africa’s $900 million issuance.
- Emerging market green bond issuance grew by 34% year-on-year to $135 billion in 2023.
- The IFC and Amundi report forecasts a 7.5% annual growth rate for green bonds in emerging markets through 2025.
In 2023, the Middle East and North Africa (MENA) region saw a remarkable surge in green bond issuances, more than doubling to $15.5 billion.
This significant increase was primarily driven by the United Arab Emirates (UAE) and Saudi Arabia, according to a report by the International Finance Corporation (IFC) and Amundi, a European asset manager.
The report, titled “Emerging Market Green Bonds,” highlights the region’s growing commitment to sustainable financing.
UAE and Saudi Arabia at the Forefront
The UAE and Saudi Arabia emerged as leaders in the MENA region’s green bond market.
The UAE’s green bond sales soared to $8.7 billion, more than doubling compared to previous years. Meanwhile, Saudi Arabia’s green bond issuance also saw substantial growth, reaching $6.7 billion.
These two countries accounted for the bulk of the region’s green bond activity, underscoring their dedication to advancing sustainable financial practices.
Sub-Saharan Africa’s Impressive Growth
Sub-Saharan Africa also experienced a notable increase in green bond issuances, with a 125% rise from $600 million in 2022 to $1.4 billion in 2023.
South Africa led the region, issuing $900 million in green bonds, a 58% increase from the previous year. This growth, though starting from a lower base, signifies a growing interest in sustainable financing across the continent.
Global and Emerging Market Trends
Overall, green bond issuance in emerging markets rose by 34% year-on-year, totalling $135 billion in 2023.
The broader category of global green, social, sustainability, and sustainability-linked (GSSS) bonds surpassed $1 trillion, matching the record high of 2021.
This trend reflects the increasing global emphasis on sustainable development and responsible investing.
Future Outlook
The report from IFC and Amundi anticipates continued growth in sustainable bond issuances in emerging markets through 2025.
The forecast predicts a 7.1% annual growth rate for GSSS bonds and a 7.5% growth rate for green bonds.
This positive outlook is based on a relatively stable global economic environment, characterized by easing inflation and a lack of significant geopolitical escalations.
The substantial rise in green bond issuances in the MENA region, led by the UAE and Saudi Arabia, underscores the growing commitment to sustainability and green financing.
With emerging markets showing robust growth in this sector, the future of sustainable bonds looks promising, paving the way for a more environmentally responsible global financial system.
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Last Updated on May 23, 2024 by Safiya K
