Ministry announces release of new report as part of its efforts to support the growth of sustainable finance
The UAE Ministry of Climate Change and Environment (MoCCAE) co-hosted a fireside chat on its green bond and sukuk program with the Global Green Growth Institute (GGGI) during COP27 in Sharm el-Sheikh, Egypt.
During the session, the ministry announced the release of a new report analyzing the situation of the green bond and sukuk market as part of the UAE’s efforts to support the growth of sustainable finance in the country.
The discussion was led by Essa Al Hashmi, Deputy Under Secretary, Ministry of Climate Change and Sustainable Communities Environment, and moderated by Mercedes Vela Monserrate, Head of Sustainable Finance at Abu Dhabi Global Market (ADGM).
Al Hashmi said, “MOCCAE is working with its strategic partners to raise awareness among key finance and investment players on the importance of green bonds and sukuk as effective financial instruments to enhance sustainability.
“We are making great strides in developing the sustainable finance industry. The United Arab Emirates is one of the most active countries in the region in the issuance of green bonds and sukuk, and the development of the UAE’s green bond and sukuk program: the analysis report of the situation aspires to contribute to strengthening the enabling environment for sustainable finance activities,” he added.
The report indicates that despite the growing adoption of green financial instruments, they may not yet be well understood by the wider financial services community. Therefore, the paper aims to help fill any information gaps by outlining the fundamentals of green bonds and sukuk and current market conditions in the UAE.
It also offers recommendations for the further development of the national sustainable finance market.
The report builds on the UAE’s Sustainable Finance Framework, launched in January 2021, and supports investments in low-carbon, environmentally sustainable and climate-resilient projects.
In recent years, the total domestic market value of green sukuk, bonds and loans has reached nearly $17 billion. While in 2020, the global green sukuk market size was estimated at $1 trillion.
The report discusses the current methodology for issuing green bonds and sukuk while explaining their ability to provide comprehensive and profitable financing. It also connects parties that have tangible bankable projects with mega-funding institutions, such as pension funds.
The document will be used as a tool and catalyst to bridge the gap between stakeholders and encourage more sustainable funding practices.