In the MENA region, we’re witnessing a financial revolution, and it’s powered by sustainability. At Mashreq, we’re at the forefront of this transformation, championing sustainable finance. Within its ambit is sustainability-linked loans (SLLs), a powerful tool that directly connects a company’s financial success to its environmental and social impact. SLLs have quickly become an essential part of the global sustainable finance scene, uniquely combining performance-based financial structures with sustainability responsibility for lenders. By the first half of 2025, the global sustainable loans market had reached a total issuance of USD 390 bn, with SLLs alone accounting for 60% of the total issuances.

By tying loan terms to clear, ambitious sustainability goals, companies are visibly demonstrating their commitment to a better future. This innovative structure makes them a potent force for good. When well-structured, they act as effective communication tools, publicly reaffirming a borrower’s commitment to sustainability. This not only strengthens relationships with lenders but also enhances transparency as regulatory demands continue to grow. We’ve seen this firsthand, with a notable growth in SLL transactions since COP 27 and COP 28 were held in our own backyard.

Of course, the road isn’t always smooth. Many companies face hurdles like a lack of reliable data for benchmarking against peers or the need for a robust, C-suite-led ESG strategy. Without this, they’ll struggle to commit to ambitious targets. That’s where we come in. We work hand-in-hand with our clients, helping them navigate these challenges. We’ve structured over 35 deals since 2022, including some of the region’s largest SLLs, proving that with the right partnership, these goals are well within reach.

Looking ahead, the market is shifting from sheer volume to quality and innovation. We’re moving beyond a phase of rapid expansion to one of maturity and accountability. We’re seeing new KPIs emerge that go beyond simple carbon metrics to address broader social impacts. The application of SLL principles is expanding to new sectors like sovereign entities and public-private partnerships.

The rise of complementary instruments, such as Sustainability-Linked Loan Financing Bonds (SLLBs), is also broadening the reach and adaptability of the SLL framework. As we continue to enforce strict principles and ensure robust governance, SLLs will not only mitigate greenwashing risks but also play a crucial role in building a credible, impactful, and sustainable economy for the future. By adhering to the SLL Principles (SLLPs) and encouraging strong governance at the company level, we can ensure the credibility and transparency of these powerful financial instruments.

Husam Abdel Al

Senior Director, Origination & Sustainable Finance, Investment Banking, Mashreq

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