S&P: Sustainable Sukuk and Green Bonds in the Middle East Could Reach $23 Billion in 2025

A report by Standard & Poor’s Ratings expects sustainable issuances in the Middle East (sukuk and green bonds) to reach $23 billion by 2025. The report indicated that sustainable issuances will continue to rise through 2025.

According to the report, sustainable sukuks constitute 35% of total issuances, while corporate and financial services issuances accounted for 27% of sustainable bonds last year. The report added that 60% of regional issuances came from the UAE and Saudi Arabia. Issuers in both countries are expected to continue their dominance in sustainable bond markets, with greater participation from issuers from other countries expected. According to the report, financial institutions set a new record in issuance in 2024, reaching $12.6 billion, while sovereign issuances saw a 56% decline compared to 2023, reaching $1.7 billion compared to $4.3 billion in 2023.

The report indicated that green projects will continue to receive the highest percentage, in line with national climate neutrality goals, particularly with regard to clean energy.

As for banks, the report emphasized that they will maintain their leading role in issuance, in addition to companies and government-related entities. Growth is also expected to be driven by sustainable sukuk, blue bonds, and transitional bonds.