{"id":95163,"date":"2025-03-11T00:00:00","date_gmt":"2025-03-11T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/ksa\/2025\/03\/11\/saudi-arabia-issued-usd-5-6-bn-in-sustainable-bond-issuances-in-2024-ranking-second-in-mena\/"},"modified":"2025-03-11T00:00:00","modified_gmt":"2025-03-11T00:00:00","slug":"saudi-arabia-issued-usd-5-6-bn-in-sustainable-bond-issuances-in-2024-ranking-second-in-mena","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/ksa\/2025\/03\/11\/saudi-arabia-issued-usd-5-6-bn-in-sustainable-bond-issuances-in-2024-ranking-second-in-mena\/","title":{"rendered":"Saudi Arabia issued USD 5.6 bn in sustainable bond issuances in 2024, ranking second in MENA"},"content":{"rendered":"

Saudi Arabia and the UAE are expected to continue leading the way with sustainable <\/strong>bond issuances in the Middle East in 2025<\/strong>, with total sustainable issuance in the region projected to range between USD 18-23 bn, according to an S&P Global report (pdf)<\/a>. The two countries accounted for more than half of last year\u2019s issuances, which totaled USD 22.6 bn. <\/p>\n

Renewable energy projects, especially solar, will dominate demand<\/strong> as GCC countries continue to prioritize energy efficiency and diversification from oil. Projects like sustainable water management, clean transport, and pollution control have also been popular in both Saudi Arabia and the UAE. <\/p>\n

New types of bonds will also increase in popularity: <\/strong>Blue and transition bonds issuances are predicted to increase due to exposure to water scarcity and hydrocarbons. Sustainable sukuk will also continue to grow, S&P Global expects. <\/p>\n

ICYMI- <\/strong>Last month, The Finance Ministry tapped HSBC, JPMorgan, and Societe Generale as global coordinators for its EUR-denominated first green bond issuance<\/a>. The offerings may include a seven-year green sukuk and a 12-year conventional sukuk. Additional details on yields and offering size were not disclosed. Proceeds will go toward financing the Kingdom\u2019s green financing framework<\/a>, unveiled in March last year.<\/p>\n

IN CONTEXT- <\/strong>The government is looking to tap green bond sales for the first time, unveiling a green financing framework<\/a> that identifies eight types of green projects to be funded through the sale of the bonds. The Kingdom\u2019s first push into green bonds comes as part of efforts to boost its clean energy transition away from fossil fuels, which remains the cornerstone of the economy.<\/p>\n

SAUDI ARABIA\u2019S 2024 ISSUANCES AT A GLANCE-<\/p>\n

The Kingdom\u2019s sustainable bond issuances in 2024 hit USD 5.6 bn<\/strong>, coming in second place in MENA despite a 27% y-o-y decline in issuance value. Financial institutions and adaptation-focused projects played a bigger role in local issuances compared to other countries in the region, the report noted. Sustainable sukuk accounted for the bulk of Saudi Arabia\u2019s 2024 sustainable bond issuance, coming in at 78% of the total, with the remaining 12% coming from other sustainable bonds, according to the report.<\/p>\n

Who were the top issuers last year?<\/strong> Al Rajhi Bank issued two USD 1 bn<\/a> sustainability sukuks<\/a>, while other major issuers included Saudi National Bank (USD 850 mn)<\/a>, Arab Petroleum Investments Corp. (USD 750 mn)<\/a>, Riyad Bank (USD 750 mn),<\/a> Saudi Investment Bank (USD 750 mn)<\/a>, and the Public Investment Fund (PIF)\u2019s USD 500 mn green bond<\/a>. <\/p>\n

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THE REGIONAL PICTURE-<\/p>\n

Despite dominating the regional market, UAE issuances declined amid post-COP <\/strong>normalization, S&P says:<\/strong> The UAE\u2019s sustainable bond issuances declined by 28% y-o-y to reach USD 7.4 bn in 2024, as peak demand after COP28 in Dubai eased, along with a higher interest rate environment. Green bonds were the most popular, with around 60% of issuances focused on energy. Other prevalent sectors included logistics, real estate, and tourism and hospitality. Meanwhile, sustainable sukuk represented 30% of the UAE\u2019s total sustainable issuances last year.<\/p>\n

Financial institutions dominated issuances in the UAE<\/strong>, led by Dubai Islamic Bank\u2019s USD 1<\/a>bn<\/a> sustainable sukuk, followed by Taqa\u2019s USD 850 mn<\/a> green bond issuance, and First Abu Dhabi Bank\u2019s USD 800 mn<\/a> bonds. The Emirate of Sharjah issued the largest sustainable sovereign bonds in the UAE at USD 750 mn<\/a> and USD 545 mn<\/a>. The region\u2019s only social bond was issued by the National Bank of Ras Al Khaimah, amounting to USD 600 mn<\/a>. Beyond sovereign and banking issuances, the biggest sustainable issuances were Masdar\u2019s USD 1 bn<\/a> green bonds and Aldar\u2019s USD 500 mn<\/a> green sukuk.<\/p>\n

MEANWHILE- Qatar had the region\u2019s largest issuance <\/strong>with a USD 1.5 bn sovereign green bond issuance. The second-largest issuances were Dubai Islamic Bank\u2019s USD 1 bn sustainability sukuk, Al Rajhi Bank\u2019s two USD 1 bn sustainability sukuks, and Qatar\u2019s second sovereign green bond worth USD 1 bn. Saudi National Bank\u2019s USD 850 mn sustainability sukuk and Abu Dhabi National Energy Company\u2019s USD 850 mn green bond ranked third.<\/p>\n

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OTHER REGIONAL TRENDS WORTH NOTING- <\/p>\n