Green Sukuk issuance in GCC and Southeast Asia increased by $6.8 billion in 6 months.
Green Sukuk issuances witnessed in GCC countries Southeast Asia saw significant growth during the first half of this year, with the volume of these issues reaching $6.8 billion, driven mainly by UAE issues, which accounted for the largest share of this growing market.
The UAE accounted for 32.3% of the total green sukuk issuances in the Gulf countries and Southeast Asia, equivalent to about $2.2 billion, according to a report by the credit rating agency. Moody’s
Green Sukuk Market Growth Expected to Increase
Moody’s reported that the green sukuk market witnessed a rapid increase in issuances during the past year, reaching a value of about $10.6 billion, and this growth is expected to continue in the coming years. This is attributed to the increase in investor demand and the efforts of governments to diversify their financial base away from traditional reliance on oil.
Government plans boost government and private issuances
Green Sukuk issuance is expected to accelerate in the future with the support of governments and the private sector. Many GCC countries are focusing on sustainability as a core part of their economic policies, to promote sustainable investments and move away from dependence on oil as a primary source of income.
Green Sukuk Issuances Grow in UAE, Saudi Arabia
The report also indicated that the UAE and Saudi Arabia witnessed significant growth in green sukuk issuances during the first half of this year, as the region recorded a 138% increase in issuances, reaching $69.2 billion compared to the same period last year.
The sukuk market is expected to continue to grow significantly in the coming years, supported by new entities seeking to meet the growing demand for sukuk instruments. Investor interest in green sukuk issuances is also likely to continue, given the increasing demand for sustainable sukuk.
During the same period in which green sukuk issuances rose again, from $5.6 billion to $6.8 billion during the first half of this year, the rate of issuances increased in the UAE and Saudi Arabia.
The report also shows that several companies and financial institutions in the Gulf region have issued their first green sukuk this year. The UAE in particular has seen issuances from prominent companies, such as Dubai Islamic Bank with around $1 billion, Aldar Properties with $500 million, and Emirates Islamic Bank with $750 million.
