ESG | GREEN FINANCE
“ The Middle East and North Africa ’ s green finance market is moving towards the mainstream , with total issuance jumping by 122 % in 2021 compared to 2020 . The issuance in the region also outpaced global growth , although the market continues to account for a small fraction of global volumes .”
Let ’ s put those figures into perspective . Bashir says green and sustainability-linked debt issuance in the MENA region reached US $ 18.6 billion in 2021 , up from US $ 4.5 billion in 2020 . Clearly , that is significant growth , but dwarfed by the three biggest green bond issuing countries – China with US $ 85 billion , the US with US $ 64 billion , and Germany with US $ 61 billion , according to Statista .
“ Developing countries are lagging although they have a critical role and impact on climate change ,” adds Bashir . “ Achieving the transition to net-zero emissions by 2050 requires substantial climate mitigation investment in emerging markets and developing economies , which currently emit around two-thirds of greenhouse gases .”
Since FAB issued the region ’ s first green bond , they have completed 14 more , and other banks from the region have taken note and followed the example set .
“ We are now seeing issuance growing as more participants enter the market , including Riyad Bank , Abu Dhabi Commercial Bank , Dubai Islamic Bank , National Bank of Kuwait , and Qatar National Bank .”
Ortiz adds that the Middle East and its oil-dependent economies have taken a longer time to develop the market . However , he says there is a clear objective to lead – with the UAE and Saudi Arabia showing the way forward .
“[ Middle East countries ] will need more time than Europe and the US to fully embrace the concept , understand its importance and develop products that are credible to international investors ,” says Ortiz .
“ However , they have the tailwinds of their sovereign funds to create scale quite quickly .”
When it comes to the biggest challenges facing green finance , Ortiz says the very
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