The United Arab Emirates’ market for climate friendly green bonds and sukuk is now worth $17 billion, according to a report from the country’s climate ministry, the official Emirates News Agency WAM reported on Wednesday.
On the sidelines of the COP27 United Nations climate summit in Egypt’s coastal town of Sharm el-Sheikh, the ministry co-hosted a fireside chat on its Green Bond and Sukuk Program with the Global Green Growth Institute (GGGI). During the session, the ministry announced the release of its new situation analysis report of the green bond and sukuk market, as part of the Gulf country’s efforts to support the growth of sustainable finance in the country.
“We are making great strides in developing the sustainable finance sector,” assistant under-secretary of the Sustainable Communities Sector at the ministry, Essa el-Hashmi said.
Green bonds are a type of security sold by governments and corporations, as a way of raising money from investors, which help raise funds for projects set to benefit the environment.
Sukuk are financial certificates, that comply with Islamic Sharia law, through which investors gain partial ownership on an issuer’s assets.
Green bonds and sukuk provide a host of climate-focused benefits. They enable users to actively contribute to achieving the Sustainable Development Goals (SDG) set out by the UN by financing sustainable projects while building green credentials that enhance their reputation as well as investor trust.
The report found that although there has been an increase in the uptake of more climate friendly financial instruments, they are not yet widely understood by the finance community in the UAE.
The report, which analyzed the UAE’s green bond and sukuk market, comes as part of the Gulf country’s efforts to support the growth of sustainable finance in the country.
The size of the global market for green bonds and sukuk alone was estimated at $1 trillion in 2020, the report said.
During the UN-led climate summit in the Egyptian coastal town of Sharm el-Sheikh, the UAE reaffirmed its efforts to mitigate the spread of the climate crisis in a number of ways.
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