The total value of green sukuk, bonds, and loans in the UAE market reached nearly $17 billion over the past years, a latest report said.
The size of the global market for green sukuk in 2020 was estimated at $1 trillion.
The market report, issued by the Ministry of Climate Change and Environment (MoCCAE), said the UAE was one of the most active countries in the region in the issuance of green bonds and sukuk.
The report, unveiled at a fireside chat on the sidelines of the ongoing COP27 meet in Egypt, pointed out that despite the increased uptake of green financial instruments, there was still lack of awareness about these products among the financial services community.
“The document seeks to help bridge any information gaps by laying out the fundamentals of green bonds and sukuk and the current market conditions in the UAE,” it said.
The report also offered recommendations for further development of the domestic sustainable finance market.
The report is based on insights gathered by MoCCAE from leading financial institutions and relevant public sector stakeholders to gauge their market readiness for issuing and investing in green bonds and sukuk, as well as the needs and priorities for the development of the green fixed-income market in the country.
The report comes amid the UAE efforts to consolidate its status as a global sustainability hub by identifying innovative solutions that support national efforts to protect the environment and drive sustainable economic development.
The report addresses the current methodology of issuing green bonds and sukuk while elaborating on their ability to provide comprehensive and cost-effective financing.
It also connects parties that have tangible bankable projects with mega financing institutions, such as pension funds.
The document will be used as a tool and an enabler to bridge the gap between stakeholders and encourage more sustainable financing practices.
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